Think Tank Paints Gloomy Forecast For Bay Area Real Estate Recovery
BERKELEY (KCBS) - The Bay Area's real estate market wasn't ready to bounce back anytime soon, according to some of the leading experts in the field. Quite the contrary, reasoned forecasters at UC Berkeley's Fisher Center for Real Estate and Urban Economics, who warned that the region's real estate market would remain stagnant for the next few years.
KCBS' Bob Melrose Reports:
"California real estate went up more than other places and it's come down more," reasoned Center co-chair Robert H. Edelstein. "Clearly, California has its own idiosyncratic problems and we're hoping that a new governor who seems to be a person who's willing to take a hard stance, I hope that's true, will get us rolling again."
Edelstein added that the shifting tide in Congress had the potential to change the country's sluggish economic tide, which in turn would benefit the California and Bay Area real estate markets.
If the economy wasn't moving, Edelstein summed up, neither would the real estate market.
"Real estate is derived by demand. And if the economy doesn't do remarkably well, real estate won't do remarkably well. And of course we also have combined with that a legacy of real estate that's in trouble, particularly in the financial institutions."
He warned it could be several years, if not longer, before the Bay Area real estate market showed signs of its former self.
Unemployment, he warned, meant far too many people weren't in a position to buy a home. That problem was especially acute in the Central Valley, where unemployment spiked and housing values plummeted.
"If you look at nationally, in California too, the magnitudes are different," he explained. "If you look at San Francisco or the expensive parts of Los Angeles and the suburbs closer, their values are down 10% to 25%. If you go to Riverside or out in the Central Valley in Northern California, they're down 40% to 80%."
Fisher spoke Monday at the Center's annual fall symposium in San Francisco.
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