Bubbles, when they pop, always (yes, always) fully retrace themselves
You can take my word for this or go read the financial history books for yourself – start with
> Popular Delusions and the Madness of Crowds
> Manias, Panics and Crashes
So, if we accept that real estate was in a bubble and that bubbles always fully retrace themselves, then all we need to do to predict a bottom is decide where the bubble started
I maintain that the bubble started in 1998 and that is where San Diego RE will bottom – other posters on this board pick bubble-start dates in the 2000-2002 range
Another factor that is common to popping bubbles is that they tend to overshoot on the downside – that would suggest that prices might go even lower than 1998 levels
When I say “1998 prices”, I mean the price-to-rent and price-to-income levels that existed in 1998 – see Rich’s article, “This Just In: San Diego Homes are Overpriced”, for the long-term charts showing these factors http://piggington.com/this_just_in_san_diego_homes_are_overpriced
~
Here’s my prediction: we have capitulation in the local markets in 2012 with an overshoot below 1998 price levels – the market then bumps along the bottom for several years before starting to appreciate again – I’ll say 2015 before prices start to rise again
Sorry that I can’t support your idea of 2000 being a bottom
