San Diego home price history reveals that it is almost never normal. The “normal” price appears to be a fleeting moment between the booms and busts. For example, the peak prices in ~ 1990-1991 were not revisited until about 1998 or so.
That said, I tried a little data exercise, where I fit a growth curve to the bottom of the market in 1996 with an initial start in 1976 (first year I found data). The average annual growth from 1976 to 1996, which covers two prior real estate cycles was a smidge over 6% This fit tracks below the actual prices for the entire period I am plotting, so I consider it a fairly conservative (worst case ?) estimate. This would imply that mid 2007 prices would be about 350K, assuming 6% growth, and 400K by 2010.
For kicks I also tried a 7% growth rate.
These are not intended to be representative of future growth. It is simply an exercise in comparing prices to theoretical growth rates.
[img_assist|nid=3589|title=Median Price Growth – San Diego|desc=|link=node|align=left|width=466|height=349]
