AN,
Besides the fact that Zillow data is extremely poor, the case you bring up is for differences in the impact of various areas. My point was that there are also substantial differences in the way home prices will be impacted WITHIN a specific area/city on a percentage basis. The $300 to $400K differences come from looking at historical sales in Encinitas/South Carlsbad which i know very well and can easily estimate what a house would sell for today. There is some wiggle room in the numbers (i.e. some in each price range do a little better/worse than average) but these are numbers I am pretty confident in as being representative. The big difference is that while Zillow is looking at averages, I am essentially looking at Same House Sales. I dont disagree with any of your comments about returns being great even at lower prices. I just wanted to point out that there are plenty of flaws in looking at averages when you cant buy an average house, you buy a specific house in a specific neighborhood at a specific price. Furthermore RSF, DM and SB are different than typical neighborhoods and dont behave the same. If you look at the others you see increases of $300 to 400 maybe a little less in a cheaper area like Santee.
