Agreed. Keep in mind we’re talking about 20% off a property that is overvalued by possibly 50%. Now looking at last months figures from DataQuick we have a median of $482,000 for San Diego county. This is down by 2.2% from August of 2005. Current median income (this is family) for San Diego is $59,520. In 2000 median income was slightly over $40,000. In six years income went up approximately 45% and housing went up 150%.
Assuming inflation and average appreciation matching inflation a home in San Diego should run about $255,000. A drop of 20% only gets us to $385,600. Not sure about you but that is still overpriced. Looking at it realistically, a 40% drop would get us to $289,200 which is about right for the market.
Slowly but surely we’ll get there. Even a 1% drop each month (our current trend) for two years will get us close to that 20% drop. Death by a thousand cuts although I’m thinking it’ll be more like 1% each month accelerating to 2% drops for a couple of months.
