By Roger Showley STAFF WRITER September 5, 2008
Local market now most 'undervalued' in state, study finds
San Diego, which three years ago had one of the most overvalued housing markets in the country, is now the most undervalued in California, the economic and financial analysis company Global Insight reported yesterday.
The market has improved because housing prices have fallen about 32 percent from their peak, while incomes have continued to increase.
“A metro area like San Diego has, in a sense, fallen too much,” said James Diffley, who directs Global Insight's regional services group.
But he cautioned that prices could drop an additional 10 percent over the next year before they level out and start climbing again by 2010. Diffley cited the continued influx of foreclosures on the market, the weak economy, and tougher lending standards that will make it difficult for buyers to get mortgages.
On the other hand, Southern California benefits from a strong export market and is not as depressed economically as some other regions of the country.