I don’t think price have gone up the way you describe. The data I’m about to show is from zillow and their 5 year chart which is what they called the Zindex. I’m not sure how they calculate it, but however they did it, it’s the same calculation for their 2001 # as their 2006 #, so that variable can be removed. You can go as far back as 10 years.
Solana Beach
Current – $1.02M
2001 ~ $400k
% increase – 150%
$ increase – $602k
You can go look at other cities as well, but throughout San Diego County, all the cities I looked at had increase between 120-160%. I don’t see any correlation between price and % increase either. So I’m not quite sure where you get those $300k-$400k price increase from. Please tell us how you compute it, it might explain the discrepancies. From what I understand from reading their description, Zillow used data from all home sold. Since they all are >120%, I think 50% drop still would not affect people who bought in 2001 and not refi to take cash out. a 50% drop will still mean 10-30% increase in 5 years. That’s 2-6% appreciation every year for 5 years. We’re not even talking about how people already start calling 2001 price too high back then. If we take a different base, like 1997-1998, that would mean a 50% drop still mean amazing return on investment.
