A year ago yesterday, we ran this story about Greg Smith, the county’s assessor/recorder/clerk. The gist: Smith had undertaken a vigorous campaign to urge people to buy homes despite the uncertain housing market. He was vehemently anti-bubble, touting the region’s status as a buyer’s market in an article sponsored and distributed by real estate professionals. But his place as an elected official — and his marriage to a Realtor in Point Loma — cast a shadow on his buy-now advocacy.

This news of soaring mortgage rates for jumbo loans — mortgages for more than $417,000 — got me thinking. (Those loans are often the only thing first-time homebuyers and others can obtain in a high-cost market like San Diego, where the median-priced home is about $495,000.) Last week, Wells Fargo and some other big-ticket lenders raised their rates on jumbo loans to 8 percent from a previous 6.875 percent level.

I remembered Smith saying in our interview on July 26, 2006, that at a certain point of interest-rate increases, “all bets are off.” So I checked back in my notes. Here’s a snippet from the transcription of the interview I did that day (emphasis is mine):

Overall, things are good, the fundamentals are good. The two big things are interest rates, and unfortunately, a negative perception in the media. People start reading that and thinking, “Oh, maybe I’ll wait.”

If, all of a sudden, interest rates start going up to 8, 9 percent, all bets are off. But if interest rates remain at these levels, I think this is a very good buyer’s market. Not necessarily a seller’s market, but a buyer’s market. And a buyer’s market in the affordable range.

I’ve put in a call to Smith to follow up with him.


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