CAR
First off I thinnk the subsitution effect is very over rated. The vast majority of buyers in the San Dieguito school district arent sitting around saying if Escondido drops another 100K I’m there. They are here as renters or homeowners but they aint goin to Esco.

The dynamics around here have changed dramatically so in way it is more “special” today. Twenty plus years there was no high tech/biotech economy in SD at least no where near what there is today. This area now appeals to an entirely new and higher demographic than it did 20+ years ago and that will never change. While I am neutral to bearish short term around here, I am a raging bull for this area over the next 20+ years. It just keeps getting better and better around here and that will continue IMO.

BTW, keeping relatively flat on a nominal basis for years like we are looking at is what I predicted, what has happened and what I beleive will continue to happen.

Here is one quick anecdote about how different it is here. I have short sales all over SoCal. I have one in San Bernardino right now and the lenders are Chase and BOA. When I work with these banks in SD County it drags on for months. In an Bernardino they are pushing to get it done in less than a month. I couldnt beleive how fast they moved in a truly distressed market. I beleive part of the reason short sales take so long here is they have far more confidence in the SD market than others. And they have the real data to know exactly what is going on between them.