California Housing in the Subprime/Credit Crisisâ€” Overview and a Forward Look at Recovery
This article describes the effects of the subprime and credit crisis on the California housing market and the fall 2009 outlook for recovery. The article begins with a description of alternative measures for tracking home price changes and discusses how median price, the Federal Housing Finance Agency (FHFA) index, and the Standard & Poors/Case-Shiller index differ as indicators. Statewide, the median price, dependent on the mix of sales, rose faster and then dropped more than the FHFA index, based on same-home sales with â€œconformingâ€ loans. Trends among Californiaâ€™s regional markets also vary by index. The FHFA indices for San Francisco Bay Area west bay and east bay areas dropped significantly less than the Case-Shiller index for the combined area. Both FHFA indices among regions and price-per-square foot data within the San Francisco Bay Area show that lower priced markets, with high shares of subprime loans experienced higher foreclosure rates, as well as the most severe price drops early in the crisis. Higher priced markets have shown more vulnerability within the last year, as the impacts of recession are added to the softening caused by the subprime and credit crisis. Uncertainties in employment recovery, interest rates, and building activity make it difficult to predict how and when the market will recover. Present trends suggest that the California housing market may be stabilizing, but it is unlikely that prices will fully recover to the pre-crisis peak in the next five years.
|Date of creation:||12 Oct 2009|
|Contact details of provider:|| Postal: F502 Haas, Berkeley CA 94720-1922|
Phone: (510) 642-1922
Fax: (510) 642-5018
Web page: http://www.escholarship.org/repec/iber_fcreue_reports/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cdl:fisher:qt9h1898m1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.