Last week, a local economist painted a dim picture of the prospects for a price recovery in the East Bay, and the data didn't make the situation in San Francisco and on the Peninsula look much better.
In a piece on Oakland Local, J. Andrew Hoerner predicted that current home prices will continue to drop by another twenty to forty percent until back in line with historical inflation trends, despite optimistic projections from realtors based on a slight, recent uptick. Hoerner will be publishing a second piece this week discussing whether this is ultimately good or bad for Oakland.
There is some good news at least for East Bay homeowners currently underwater on their mortgages, in that there's been an increase in short sales relative to foreclosure sales. With short sales, the seller takes less of a credit hit than someone who walks away in a strategic default, and the bank loses less money as well.
What do you think, are more short sales a good sign? Is Hoerner's math or the conclusion drawn from it all wrong?
The Bubble by the Bay (part 1): Big Home Price Declines Still to Come [Oakland Local]
More short sales than bank-owned properties for sale in Oakland [Examiner]
