If mortgage interest rates increase over the next couple years I could see the smaller/older 3/2 MM homes dropping into the mid-$200s. I wouldn’t think they’d get down to $225k though.

Mira Mesa has a very central location for a lot of workers. The home prices there really should be higher than for some of the North County communities. I’d say the same thing for the South Bay communities – they’re a lot closer to decent employment.

I think there’s some room for rents to drop, too. The extra money people are spending on gas and groceries has to come from somewhere, and looking for the cheaper rental is the easiest way to do that. There’s also the employment situation. All those refugees from the RE-related businesses will replace their jobs with lower paying jobs, thus reducing the amount they have for rents.

It’s just going to take some time. Rents down by 10% + mortgage interest rates up by 2.5% or 3% and a $250k MM 3/2 is a possibility.