“Thanks for the feedback SD Realtor. I like the area a lot but I think I would wait a while to buy a house in this area at a better price. sdr thinks the bottom for a house like this is around 640K. What do you think?”

Hi DRA –

I think that the bottom for Aviara in general is in the 10-20% range overall over the next 2-3 years in the absence of total socialization of housing or interest rates at 3% (or something crazy like that). The bottom in my opinion is getting fuzzier and fuzzier due to all the misdirection by the government. I always feared the level of intervention but I can say with all honesty that I did not comprehend the level of tenacity that the government would display. I think we are going to have a market with more inconsistent behavior as we move forward, more then we have seen in the past depreciation cycles. To me we still have the two beasts of unemployment and foreclosures to cope with. One of the ramifications of this next trillion that the government is throwing in the toilet will be to keep rates low. This will not only help new homebuyers but it will also make it easier for those who are bought in the past few years with 5/1 ARMs to refinance. So I can definitely see a choppy market coming. The real acid test will be when things start to pick up and rates start to run up again, OR if someone like China blows us out and dumps treasuries. This will create a situation that I think, will be a bigger blow to home prices then anything. Look, if we are in a 8-10% interest environment I can see prices for desireable homes REALLY getting slammed. I don’t know when that will happen or if that will happen but the odds seem to be growing.