Survival Skim: Mulling 'Bottom' in 2010
Prognostications for the new decade, big economic questions and taking the local economy’s pulse.
The housing/economy prognosticating carries into the new decade! Here’s your roundup of some of the stuff I’ve found interesting in the last few days:
- The Union-Tribune’s Dean Calbreath wrapped up some insights shared in a big panel last week on the state of the local economy. His five categories to watch: employment, home prices, retail and tourism, stock prices and government. So, when you get done weighing all of those factors …
- … it’s time to buy a house! That’s the opinion of Gary London, local real estate analyst. Here, I’ll let him call bottom in his own words:
If you want to buy a house, or just refinance it: Buy or refinance it now, if you can qualify. This is the bottom. While the shadow of bank-held inventory hovers large on the housing market, and lenders are still reluctant to lend, except to the most qualified, there is a lot more room for optimism than last year at this time. We will gradually see more listings of homes for sale on the market, prices seem to have stabilized, and more people will want to buy at the bottom, which will upwardly impact pricing.
- If those caveats make you a bit less optimistic than London, you’re not alone. London quotes economist Chris Thornberg on why he’s somewhat uncertain about 2010 — it’s because we’re living in “a world which is dominated not by economics.” More of Thornberg’s take:
2010 is a giant question mark. There is no consensus (among economists) of what is going to happen. … Our economic future mostly depends on government policy.
- I didn’t post Alan Gin’s latest economic index released last week, which neither rose nor fell between October and November. That broke a seven-month streak for increases in the index, buoyed in recent months by sharp spikes in consumer confidence. Gin still expects a weak first few months of this year and an improvement in the summer and fall. You can read more of Gin’s analysis here.
- Speaking of factors affecting the housing market, Roger Lowenstein penned an interesting piece in The New York Times Magazine this weekend, examining the plethora of moral and social arguments offered for why homeowners who are underwater will stick it out rather than voluntarily fall into foreclosure. (In September, 32.5 percent of San Diego County homeowners with mortgages owe more than their homes could sell for.)
— KELLY BENNETT