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Global Insights market report for housing over [under] valuation.
(sorry for the lousy format)
First quarter (except 2006Q4 entry) over/[under]valuation for 2003|2004|2005|2006|2006Q4|2007
San Diego, CA $320.0 6.0% | $389.3 18.9% | $480.8 39.2% | $498.1 35.1% | $475.9 25.6% | $469.1 21.6%
Los Angeles, CA $286.8 1.1% | $353.4 18.4% | $439.8 41.0% | $521.2 57.7% | $527.9 55.7% | $524.9 52.1%
These numbers are all overvaluations, but as recent as 2002, this same report had LA and SD as undervalued -5.5 and -3.4, respectively.
They also stated that the higher the overvaluation, the faster and harder the reversion to the trend. I guess you can think of it like a stretched rubberband. Which gives some credibility to the “fast” theory of depreciation.
Though, I stubbornly cling onto the long, painful decline model.
I also find it interesting, given how pessimistic people are on SD, that LA looks to be in for far worse. Maybe Arnie can save us with his acting.