Keep in mind, the 47% is real, adjusted for inflation.
I wouldn’t expect the credit issues to ‘thaw’ for a while, so continued pressure on jumbo markets such as SD from the financing side.
Combine with enormous inventory overhang, much of it must-sell, shadow inventory in the queue, with more bank failures on the way, all on the supply side.
Factor in a deteriorating economy, job losses, which are starting to accrue in significant numbers, a huge fiscal anti-stimulus from CA state and municipals looking to cutback, oil shock and associated repercussions, etc.
Dan, I buy the point about neighborhoods that have already deteriorated. And also about foreign money, exchange rates make SD look cheap. Friends from Europe who just bought in RSF and believe they got a deal.
I’m an optimistic person by nature. But I don’t see anything positive for the SD market for a couple of years. The bubble aftermath has already surpassed my expectations in terms of how much of an adjustment there would be.
If I had to throw some guesstimates out there, I think it’s going down maybe another 40% real and 20% nominal over the next 3 years. (I think actual inflation incurred by the average consumer/homeowner is being understated.) So I guess I’ve adjusted to ‘Fitch’ numbers, but have been in denial about it.