San Diego Housing Market News and Analysis
Slow decline or is a big chunk about to be ripped out?
User Forum Topic
Submitted by sdrealtor on June 4, 2007 - 10:31am
On a couple threads there has been some back and forth about what is coming in the next few months. Admitting I am in the long and painful decline camp with SD R and a few others. On the other side we have those that believe a large chunk of pricing (10% or more) is about to be taken out of the market quickly (LS2008, Rustico etc.). I'm not married to my opinion but beleive what I do based upon what I see in the markets I generally follow. Here's my case:
Closed sales figures for the 1st 5 months of 2007 vs. prior years for Coastal SD from Point Loma through Carlsbad show that volume is not declining there.
Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).
2004 2,684 sq ft $1,072,428 ($400/sq ft)
I only have inventory for a couple ZIP that I follow closely but it is way down vs. last year in these areas.
My problem stems from my inability to see how a pricing collapse would happen administratively. I just dont see people with equity dropping their acceptable prices form 850K to 750K or from 600K to 500K. I dont see the lenders doing it either with inventory levels where they are. I'm not saying it's can't happen, I would just like to here some theories as to how it could play out over the next 6 months so we can all kick them around.
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