I basically agree with you Bugs. When I use the term “bifurcation” I use it in the sense that “everything will suffer, but to varying degrees.” Perhaps I wasn’t clear on that point.
To use the residential market as an example, if the median peak-to-trough decline in SD County ends up being 40% – just to pick a number – there will be certain areas (think Chula Vista, Imperial Beach, etc.) that will decline by 50% and other areas (think La Jolla and RSF) that will decline by 20%. We have seen similar outcomes in previous downturns. (“Location, location, location” won’t save anyone from a decline, but it may save a lot of folks from the dramatic declines witnessed in other areas.)
I think we will see something similar on the CRE front going forward. All will suffer, but to dramatically varying degrees. But I could be wrong.
