When you hit the top of the market, asking prices go up, but selling prices don’t, and sales stall.
This is exactly happened in my zip code (92117) back in August (that’s 7 months ago). Many of the houses never sold – they were taken off the market or rented out.
I sold a house in August so I am intimately familiar with this zip code. My asking price was much lower than most asking prices, but right in the middle of comparable closing costs and sales started stalling right about then, too.
Also, the few things I have read about Orange County indicate they are about 6, maybe even 9 months behind San Diego in terms of the bubble deflating. Your article suggests the same thing to me, if the increased asking prices stall the market.
Keep an eye on sales volume and closing prices. They will be more indicative of the market. Also, keep in mind sales volume typically jumps about this time of year so if even it it goes up a bit, that still may indicate a stalling market.
