According to an article in the San Diego Union-Tribune, housing prices in San Diego rose for a third straight month in July. Economists believe that three straight months of increase should indicate that the market has hit the bottom and will soon go into recovery. But analysts throughout the area disagree.

The Standard & Poor’s Case-Shiller Home Price Index rose 2.5 percent from June to July for San Diego, the biggest one-month boost in four years. But analysts agree that now is the time to be cautions. They say that increases in the coming months will depend on three factors: the impact of the Nov. 30th end to the $8000 federal tax credit for first-time buyers; anticipated higher unemployment rates; and an expected increase in foreclosures.

The President of the San Diego Association of Realtors said that the end of the tax credit would be a “tragedy” because it would diminish the ability of first-time buyers to purchase a property. But he also said that the expected increase in foreclosures could help the first-time buyers.

The big question is if the 3-month increase in home prices really signals a turnaround. Here is the most optimistic opinion from Jennifer Lee, an economist at BMO Capital Markets. “No matter how you measure it, house prices look to have bottomed, which is the much-needed ingredient required to bake this housing market recovery.” Let’s hope she’s right!

This entry was posted on Wednesday, September 30th, 2009 at 4:52 pm and is filed under My Real Estate Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.