I agree with the post about the 10 year Treasury yield. Being a sideline watcher of the market where I live (Torrey Highlands area of Rancho Penasquitos) I saw a decline in the value of my property of over $100K in a fairly short period. I would say over a 6 to a 12 month period. That represented almost a 15% drop from peak pricing. My very non-expert/scientific opinion was that three things turned the values down the biggest being 1)the yield on the 10-yr T-Note started going up (and therefore mortgages rates started going up), followed by 2) gas prices increased alot 3) there was a general perception that the market had turned. Those three things combined to drop prices over $100K in a short period of time. Funnily enough in the last couple months what have we been seeing? 1) Yields on the 10-yr T-Note going up alot and ave. mortgage rates going up as a result 2) Gas prices going up. So it will be interesting to see what happens to sales prices that come up in a month or so when we see escrows closing from current sales right now. Just can’t get a pulse on 3) – that is the buyers perceptions at this moment….a few recent sales have been both way lower and then one way higher than previous comps. Very confusing.

Anyway, I do watch the 10-year yield on the T-Note religiously every day and honestly have been getting a sick feeling in my stomach every day lately as I see it tick up and tick up and tick up……

I have quoted this guy before (Chief Investment OFficer for Wells Capital Mgmt). I heard him say once in regards to the American consumer that his feeling was their mentality could be stereotyped as something like “you can mess with gas prices, you can mess with taxes, you can mess with anything (his list went on and on)…but don’t mess with my mortgage payment”. So I believe that once you see the 10-year Treasury note yield going up much more…the tipping point will be hit and the next $100K plus drop will be less than 6 months to fruition. This is just specific to San Diego area of course.