UCLA Anderson Forecast Outlook for San Diego County Real Estate

As I write this post the economists for the UCLA Anderson report are having breakfast in San Diego at the Marriott. My prediction for these economists is the only thing on the menu at this years breakfast… CROW.

Yes, the UCLA Anderson report authors will have to eat some crow in San Diego today. Last year they predicted San Diego would have a modest downturn in prices or remain relatively stable. What will be the outcome of this years predictions for America’s Finest City?

By 10:30am they will have finished giving the 2008 Outlook for San Diego Real Estate. Again, I can only imagine that once again they have said our local economy is NOT in a recession. I and a few others MAY disagree with them. What’s your opinion.

In an early release by Newswire this morning UCLA Anderson says,

“Our forecast for the next two years looks for real estate weakness to gain the upper hand in the next two quarters, leading to small losses in non-farm payroll employment, a modest spate of increased unemployment, and very weak growth in incomes and local output,” said Ryan Ratcliff, economist, UCLA Anderson Forecast and Alan Gin associate professor, University of San Diego, both authors of the San Diego Forecast report. “By the end of 2008, we should start to see the light at the end of the tunnel, as real estate job losses taper off and the housing market begins to stabilize.”

The economists also noted that we’ve seen somewhere between 7-16% price declines and that it will be mid 2009 before we start to see a Normal Housing Market.

The Crystal Ball Prediction for San Diego Real Estate

Wouldn’t it be great to get a look into the crystal ball of San Diego, California real estate and see what’s in store for house prices and the real estate market overall

Well… I’m sure I’m not the first to tell you there is no such thing as a crystal ball for real estate. What I am here to tell you is that the closest thing to a crystal ball I’ve seen lately is our San Diego County Tax Assessor, Gregory Smith. Gregory has been our real estate Assessor/Recorder/Clerk for the past 25 years and spoke today about our current San Diego real estate market.  The following comments are my notes from his presentation:

YES, California and San Diego are in a recession.

We are at or near the bottom of the market currently. Prices should level off in 2008. One good sign is that there were over 3000 recorded documents at the County Recorder’s Office last month – the first time it’s been over 3000 in quite some time.

What we need for a recovery concerning San Diego real estate comes down to 3 things:

1. Interest rates need to get back to the Mid-5% range. People seem to think that below 6% is the magic number for interest rates to be considered good.

2. A full implementation of FHA needs to be embraced. Jumbos have to come back in line with conforming loan rates.

3. Foreclosure inventory needs to go down. Downtown has roughly 2000 units for sale with 2500 more coming online this year. The beachareas have the least affected by the foreclosure market. By the end of the year 2008 most of the foreclosures will be off the market.

The County Assessor’s Office is getting about 300-400 submissions for Proposition 8 a day. The cut off day is the end of this month. It’s great for people who have a lower property value in comparision with their appraised value.

2008 is the bottom of the market. Survive 2008 and 2009 and 2010 will be better for the real estate industry.

This is the best time to buy property. Even if you have to sell your property now and buy again in San Diego it will be better to buy now than wait. You’ll save on property taxes in the long run.

Did you read that last line?

The very wise and always to the point San Diego County Tax Assessor, Gregory Smith just said that NOW IS THE TIME TO BUY REAL ESTATE. He’s advising us to save on taxes in the long run by purchasing a move-up property now rather than waiting.

As usual, I’d love to hear your thoughts on this matter and the preceding comments.

Is California In A Recession?

NO, California nor the USA is in a recession… according to this recent article from the UCLA Anderson Forecast. 

The California forecast

UCLA Anderson Forecast economists Ryan Ratcliff and Jerry Nickelsburg look back at the California economy since World War II and come to two conclusions. First, the U.S. and California economies move together — there has never been a recession in California without a national recession. Second, the California recessions have twice been amplified and extended by long-lasting structural adjustments — the Southern California aerospace contraction in 1990 and the Northern California tech bust in 2001. The recession-only downturns have been sharp-but-short contractions driven by temporary job losses in manufacturing and construction. These recessions typically last less than a year, but both the aerospace and the tech adjustments took more than half-a-dozen years to complete.

Today’s economy fits neither of these patterns; our economy is in “uncharted waters,” they say. There are some negative signs, such as job loss in real estate-related sectors, but it is unlikely that these sectors can create enough job loss to generate the 2 to 3 percent declines in non-farm payroll employment that have characterized past recessions.

The forecast is for a very weak California economy in 2008. The “double-whammy” of construction and financial activities job loss will continue to drag at the economy.

“The current state of the California economy and our forecast fall short of the weakness in previous historical episodes that we’ve chosen to label recessions,” Ratcliff and Nickelsburg write. “Based on comparing the current economy to past recession episodes, we once again conclude that real estate weakness will remain a significant drag on the economy, leaving us treading water in 2008 — but not slipping under the waves into recession.”

The Wealthy Are Buying Real Estate… Why Not You?

According to The Annual Survey of Affluence and Wealth in America, from American Express and the Harrison Group, 40 percent of the nation’s wealthy plan to buy real estate in 2008.

What do these rich people know that you don’t? Read HERE to find out. It is TIME TO BUY real estate.

You make money when you buy, not when you sell a home, suggests one popular idiom. That could be the reason the wealthy are trolling for bargains. While most of America is struggling with four percent gains in inflation, the wealthy, with discretionary income of $100,000 or more, believe that today’s market is a good time to buy.

When you think it’s time to buy click HERE.

Today is a BONUS Day! Carpe Diem.

Listen Up! This is truly a SPECIAL DAY… it’s your bonus day. GO OUT AND DO SOMETHING AMAZING FOR YOURSELF!!!
How often do you get an extra day in your life? What if this was your last day? What would you do? No… REALLY? What would you do to express yourself fully and completely?

This is my 6.2422 Step Leap Day challenge to you:
1. Get Massively Creative and Inspired
2. Do Something Unexpected for You and those You Love
3. Mix a healthy dose of Extra in your ordinary day and get all kinds of Extraordinary
4. Break out of your normal routine and try something unusual, exciting, new… NOW! Get to it.
5. Invite your community of people to join with you. As many as possible.
6. Share what happened with the world via YouTube, Your Blog, Twitter et al. Inspire others.
6.2422. MAKE LEAP DAY A TRADITION IN YOUR LIFE as often as possible.

…shut off your email and go make someone’s day;^)

Below is the email that inspired the above post. I received it from one of my West of the Five clients this morning and is worth reprinting.
Thanks to MikeD and being back on coffee for the inspiration.

“Dear Friends,

Today is a BONUS day that we only get to celebrate once every 4 years.

It’s Leap Day!

I wanted to take this opportunity to remind everyone how cool life is and to take some time and appreciate it. Also, I think leap year is pretty fascinating and thought you might enjoy the knowledge. Check it…

Why do we have leap years?
First, in order to clearly understand what a leap year is, let’s define the following.

One day: The time it takes for the earth to rotate once.

One (solar) year: The time it takes for the earth to revolve around the sun once.

One (Gregorian) calendar year: 365 – twenty four hour days.

Pay attention, because this is where it gets cool and rocks my world (literally).

One solar Year = 365.2422 days

Since our calendar is only 365 days long, there is a distance between where the earth is on its revolution and the end of its 365th day (365 rotations) and the completion of its orbit around the sun. It will take the earth .2422 days or just under 6 hours to cover that distance. Over the course of time, neglecting to adjust for this distance (1/4 day) would cause our seasons to eventually “drift” between the months. The fourth of July would one day be cold at the beach.

In order to ensure the seasons stay inline with our calendar (which is really just convenient for us) we add one day to the year every fourth year.

This system is not perfect though! You may have noted that one year is not exactly 365.25 days. There is still a difference between the calendar year (even with leap year) and the solar year. Adding one day, every fourth year is TOO MUCH! So… here are the rules for determining Leap Year.

1. Every year divisible by four is a leap year.

2. Of those years, if a year can be divided by 100, then it is NOT a leap year.

Unless…

3. The year is divisible by 400. Then it is a leap year.

Examples:

1900 = not a leap year

2000= leap year

2008= leap year

I hope everyone has a great day! It’s bonus so enjoy it!”