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There are a few reasons why I still believe this market has some room to drop. First off nationally unemployment will most likely hit 8.5%+ for the month of March, which we will hear in a few days. CA is well over 10% and climbing quick. We are now seeing the potential of GM and Chrysler filing BK, which will add to the already catastrophic numbers. Lending is still pretty tight in most areas except for the housing market, go figure. And we still have a huge amount of ghost inventory sitting with the banks.
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In my opinion, unemployment(or underemployment) will have vastly different impact based on the locality versus nationally.
What i mean by this is that. You mentioned GM/Chrysler BKing….This mostly likely will have the biggest impact on Detriot,Ohio,etc. However, I doubt this particular company(ies) will have as much of an impact on S.D.
I guess the key to figure out for the S.D. market is how much is unemployment rampant in this area. Find out which are the bellweather company(ies) and see what they are doing. Fortunately, GM/Chrysler doesn’t appear to be a larger employer in S.D. 🙂
It’s going to be a little more challenging probably for S.D. because there probably isn’t a highly focused concentration of one specific industry here in S.D. So you’ll probably need to figure out how each of the major bellweathers for each of the sectors are fairing. My gut feeling is the unemployment in S.D. (while it’s getting bad) isn’t nearly as bad as other parts of C.A. or parts of nation like Detroit. for that matter (yet). Namely, while retail/RE/construction/etc is looking bad, and biotech is looking bad, and some engineering is looking bad, you still have companies doing ok (defense companies for instance) at least for now.
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I believe San Diego’s unemployment rate is aroung 8.8%, which is slightly below the current 8.9% national unemployment rate, and lower than the 10.9% unemployment rate of the State of CA…..and much lower than the 13%+ unemployment rate in Detroit….(mind you, this is BEFORE any GM/Chrysler BK. I’ll say this much. those $5000-$8000 priced SFH’s in Detroit are no screaming deal.)
