Continued smallish negative growth (5-10%) in house prices are presented by SDrealtor in his SD “areas of interest” in 2007 and suggests the same for 2008. Perhaps my bias toward a sizable overall correction colors my simple analysis. It would take ~6.5 years @ 7.5% yearly depreciation vs. ~4 years @ 12% YOY price depreciation to accumulate a 40% reduction. I just don’t think that SD is capable of dropping continuously for almost 7 years. It does look feasible that we could see a cumulative 40% decline off the peak. Based on this, I would expect an average of 10-12% YOY declines until 2011 or so. If California goes into recession, which appears very likely, negative valuation should should increase significantly for that period. Of course, the big wildcard is inflation.
SDRealtor – GREAT observations/analysis; nice to see an honest businessman.
Looking to return to CA coastal when the dust settles.
