Local economist: worst of real estate crisis is over

April 26, 2010 7:09:48 PM PDT
After a devastating couple of years, a leading economist says the worst of the Bay Area real estate crisis may be over. He believes there are signs of a turn-around.

"We think we've already turned the corner," says UC Berkeley economist Kenneth Rosen.

Rosen believes the ailing Bay Area real estate market is finally on the rebound. The remarks came during Rosen's semi-annual economic forecast in San Francisco.

"The housing market is getting much better. It has gotten much better because of low interest rates, because of the tax credit, for both the national now the California tax credit. It has made purchasing a house very affordable at this time. It's the best affordable housing situation we've had in almost a decade," said Rosen.

Realtor Vickie Nagy is on the ground in Contra Costa County, where foreclosure activity is no longer the dominant feature of the market.

"Our market here is strengthening. It continues to strengthen. We have multiple buyers; it is a strong seller's market. We have reduced inventory, but we are seeing some sellers, just traditional resellers brave the market and come on right now," said Nagy.

Mortgage brokers say they too are busier than ever, at least those that have managed to stay in business.

San Ramon's Bank Of Commerce Mortgage is actually expanding.

"We're very optimistic. We see purchases picking up a great deal, so we're on the front end of that curve. And for instance, putting my money where my mouth is, I just recently purchased a house in the past couple of weeks myself," said Mario De Tomasi from Bank of Commerce Mortgage.

While there is also a fair amount of optimism about the Bay Area real estate market, there are also a few red flags.

"We've lost a lot of jobs, we have a fairly high unemployment rate, so many people are still at wits end and may lose their houses," said Rosen.

That being said, Rosen believes the damaged done to the housing market by unemployment may be offset by low interest rates, as long as they stick around.


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