Again permabear, what’s your definition of small? Now that you specified the desired zip code, I’m even more skeptical as to your statement of not able to find good big houses for 800k-1M. My definitely of big = 3000+ sq-ft. Here are some examples:
92127 doesn’t really have a lot of houses in the 800k-1M range. There are plenty <$800k and plenty > $1M. Are you expecting those $1.4M houses now to drop to $1M? If you are, then that would put these houses at around 2000 nominal prices. Example would be http://www.sdlookup.com/MLS-100068741-16979_Going_My_Way_San_Diego_CA_92127 sold at $1.24M in late 2003 new (assuming price does not include landscaping).
92129 doesn’t really have a lot of houses > $800k. There are some pockets of large houses going for $800k+ but that’s a small portion of 92129.
The bigger question is, how many people looking in the 800k-1M range are looking for 4000+ sq-ft houses? I personally rather get a 2000 sq-ft house in Delmar than 4000 sq-ft in SR. The supply for 4000+ sq-ft houses is not that big and majority of them are geared toward much higher end buyers than those making $200k and don’t have a lot of down payment. Maybe you have tastes of $1.5M+ houses but your budget is only $800k-$1M, that’s why you’re not seeing that many houses that fit the bill.
