I would agree with the side that the prices will revert to the mean. I don’t know what that will be but we will all find out. Powayseller and I were talking a bit about this today, that we all should keep the conversation within a local context. That is, each mean will vary for each persons neighborhood. Overall the mean may be a 50% slump over the next 3 years but it is doubtful that beachfront property will slump 50% right? Similarly it is highly probable that other developments will slump over that number. These could be spots that appreciated much faster then other spots, be it condos in UTC to many of our favorite high end Carmel Valley subdivisions. It is all speculative.

So personally I do believe the slump will be big and it will hurt bigtime.

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Other thoughts…. I am not an expert on Prop 13 but as I see it, one of the remarkable failures of prop 13 is that it allows for tremendous tax advantages for commercial and corporate owned properties. I think that the intention of providing relief for individual consumers has worked very well. However, there is TREMENDOUS lost revenue on commercially owned property that has not changed hands for a long time.

Someone can correct me on that…

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Yes if prop 13 were repealed I think it would add a SUBSTANTIAL depreciation factor to the market. As an owner of a few rentals my choice would be to sell them or to pass the hike off in a rent increase.

Several people I know who live on fixed incomes would also be hit in an very substantial manner.

I think there is a way to fix prop 13 so that it would work as it really was intended to work.

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