Even though the market is soft or very soft in most areas, the median resale prices are only off 5% to 6% from the record highs last year. We’ve got a long way to drop to hit some of your predictions of 30-50% declines. Could it be that my prediction from last spring or summer that median prices would drop no more than 10-15% by the time the market bottoms out come true? You know, the prediction that I was battered, bruised, and abused for?
Don’t get me wrong, there is plenty of more bad news ahead for the market in San Diego. I did an appraisal in San Elijo Hills today and it is kind of shocking how much some homes have dropped in value. There are some houses that sold in 2004 for $850,000 that are only worth $700,000 or $725,000 now. So there are going to be lots of foreclosures in the next couple of years. There is one foreclosure on the market there, where the original purchase included a 100% loan, and the lender is going to lose $200,000+. The one good thing happening in San Elijo Hills is that the builders are really slowing down their production due to a lack of sales, instead of flooding the homes with excess inventory.