Economist Nouriel Roubini, chairman of RGE Monitor and economics professor at New York University’s Stern School of Business, says the US economy is threatened with “double-dip” recession.
At best the US economy will be a slow-growth U-shaped recovery, that is slow and anemic growth, rather than a V-Shaped rapid return to potential growth.
Bank failures and foreclosures will be the norm. Roubini predicted more than 1,000 financial institutions may fail before this recession is over. He predicts housing prices to fall another 12 percent in the next year. That an average of 40 percent nationwide since the market began its steep decline.
San Diego homeowners may see the real estate prices fall to 50 percent or more. This would leave about half of all homeowners owing more on their mortgages than their houses are worth. “The gap between supply and demand is so huge we could stop producing new homes for a year to get rid of all the inventory,” he said. “This price adjustment, in my opinion, is going to continue for another year.”
San Diego homeowners facing financial difficulty should consider a forensic loan audit combined with either a loan modification or short sale.
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