1. 80% or so of homes sold after about 2002 have explosive ARMs. When they reset, the owners have no alternative but sell if they can. Of course, most can’t for money they owe causing foreclosure. REO properties eventually go down in price.
2. Credit crunch means no mortgages of funny kind. Definitely very few Jumbos. Without qualified buyers where is the market? We don’t even have to introduce affordability logic here.
3. If your friends like to just take a walk around they can see “For Sale” signs everywhere. And they are not going away after 3,6,9,…months. Questions?
4. Let them take a look at $/sqft statistics from Sandicor/DataQuick/RealtyTrac etc., It is coming down fast!
5. Population movement. Are people moving in or out of SD? I think it is out. (leaving aside illegals, who can’t buy, at least not right away) What does that do to demand and supply? And prices…
6. Are they not reading about mortgage companies going out of business like dot-coms of 2000? Show them implode-o-meter website. What do they think will happen when most are out of business. Yep, the rates will skyrocket. Just like credit cards.
7. They should read sites like piggington, patrick.net, calculatedRisk etc.,
