Bravo to sdrealtor for sticking his neck out. We shall see if his predictions are borne out.
At the risk of restating prior posts, the lower end will be substantially employment dependent. Tech jobs, and in particular new venture formation, may be heavily impacted in the coming months. Reference: Semiconductor equipment is the leading edge of semiconductors, and those firms have begun layoffs. The semiconductor layoffs are not too far behind. Regarding Qualcomm: While it is correct that people are not giving up their cell phones any time soon, they may also delay upgrades and so forth, impacting that consumption. Chip suppliers are pressured along with everyone else when margins are squeezed.
That segment of the market is perhaps more interest rate dependent; if in 2009 the competitive interest rates (e.g. t-bills) rise substantially, that would put a damper on the sales.
Regarding the large down payment crowd: The money destruction is proceeding but will go on for quite a while. Cash available for large down payments will recede, but gradually, not cataclysmically. This is a good thing, because if quick, we would all be sorry.
The high end is beyond uncertain. New venture formation, and IPOs, has contracted. Another wealth effect supporting the high end is simply residual bubble effects: people who pocketed hefty cash on the way up and do not want to leave SD. Specifically within Carmel Valley, if the Chinese economy remains sound, and the yuan is allowed to float up, there will be an influx of wealth into that area. If the Chinese economy suffers, and the yuan peg is maintained, that would hurt Carmel Valley in particular. If the Chinese buyers go away, look out below. In general, it seems that the >$800K tranche of houses is heavily supported by the high down payment crowd; bear in mind that that wealth is subject to ongoing destruction.
