SAN FRANCISCO — Bay Area home prices should rise modestly over the next two years, but the size of the increase likely will diminish the farther away you get from Silicon Valley.
Speakers at a UC Berkeley real estate conference Monday noted that healthy job growth in the Bay Area's tech and social media sectors is having a positive impact on residential real estate between San Jose and San Francisco. But the housing markets for California and the nation are still struggling from high numbers of foreclosures and a lack of consumer confidence.
"Are we out of the woods? No, not at all," said Alexander Villacorta, director of research at Clear Capital, a real estate information firm.
His firm predicts a slight rise in Bay Area home prices over the next two years. But prices likely will drop further in Los Angeles and Riverside counties.
Despite historically low interest rates and a plunge in home prices, many consumers today aren't purchasing single-family homes, the experts said. Some have difficulty qualifying for loans under today's tougher credit standards. Others are hesitating due to uncertainty concerning the direction of home prices and the amount of distressed properties that still must come to market.
"We've got what I call analysis paralysis," RealtyTrac CEO James Saccacio said of consumers. "They're not buying. They're waiting."
Both men were speakers at UC Berkeley's 34th annual real estate and economics symposium at the Westin St. Francis Hotel.
Saccacio said both the nation and California still have large amounts of distressed properties, including homeowners in default and those who owe banks far more than their homes are now worth. At current absorption rates, he said, it could take the state 28 to 33 months to work through that supply.
Speakers also suggested that global worries would weigh down the housing market.
Kenneth Rosen, chairman of the Fisher Center of Real Estate and Urban Economics, said the United States is headed for a "choppy recovery" over the next year, and Europe's sovereign debt crisis "could spin out of control."