Our report on San Joaquin County Housing is out.
Given the current real estate turmoil, I think it is worthwhile to take a moment to look at the long-range view.
The early comments are interesting. Mostly positive, but some people think we are in the pocket of the building industry. Quite the opposite, now that I have bought in the area, I would personally benefit if building stays low for a long time. However, no building would be a bad result for non-homeowners and the overall economy (harming all of our incomes). High housing costs absorb people's income and leave less for other things (harming quality of life, and non-housing business sectors). They drive up business costs and discourage investment.
Remember, foreclosures are driven by people with mortgages they can't afford or have no incentive to pay (because they have large negative equity).
Sometimes, high foreclosure rates are said to indicate an excess supply of unwanted housing. However (dusting off econ 101 here), excess supply is defined at a given price. At a median price of $440,000, SJ County has more houses than people want to buy. As we are seeing now, when prices drop, people want those homes and the market clears.