Freddie Mac’s chief economist was just in San Diego for the annual American Economic Association meeting and gave his predictions for the housing market in 2013…
Noting the beginning of the turnaround last year, mortgage giant, Freddie Mac’s top economist Frank Nothaft said that he expected another 20 to 25% rise in housing starts in 2013 with the home sales pace picking up another 8 to 10%. For Southern California in particular including San Diego real estate he went on to forecast a continued “pick up in home prices and sales”.
In terms of foreclosures Nothaft says expectations are that they will remain at relatively high levels this year, with almost a year’s worth of housing inventory in seriously delinquent loans lurking out there. Yet, at the same time the economist suggests we should expect availability of bank owned REOs to be limited over the next 11 months. So while there are plenty of distressed property deals out there for real estate investors, they will need to get more creative in taking them down.
When it comes to mortgages Frank says he thinks the Fed’s plan to stimulate the housing market by pushing down interest rates is working and expects the 30 year fixed rate to stay below 4% during 2013.
Of course while interest rates may remain low and some types of loans might have been getting slightly easier to come by for San Diego real estate buyers and owners new mortgage rules going into effect on January 21st will play into trends as well.
The new rules dreamed up by the Consumer Financial Protection Bureau could certainly make things a little tougher for prospective borrowers in the short term, though are expected to boost lending in the long run on confidence in the system and more liquidity. Sadly, though these new rules only seem to restrict borrowers and who can borrow what instead of regulating lenders or cracking down on them for the real abuses which have gone on.
For those seeking more creative financing solutions some loop holes may be found through non-profits who could be exempt from the new mortgage rules as well as commercial lenders.
So in all it will be a stellar year for San Diego real estate, just a little better for those prepared and positioned well.
