I have read some of the stuff on Jim’s blog. He’s quite a sharp agent with way more backing for his arguments (rather than the usual “San Diego has great weather” justification.)
He presents a scenario where the “superior homes” will fall no more than 5-10%. He bases this mainly on the fact that these houses are unique, i.e. scarce, when compared to tract homes. I’ll buy that. My own definition on superior and inferior has more to do with uniqueness of architecture than location (i.e. anti-cookie-cutter homes), and I’m seeing the prices go down here, all the while being hard to find comparables. In today’s hustle bustle society, location is more about the commute to work than being next to some historical landmarker.
The main weakness in this scenario is the fact that he’s talking about 5-10% off of prices that were driven up from below. Mediocre homes took over the 500’s. Decent homes took over 700’s. Beautiful homes 900’s. And then all the newly anointed “million dollar homes.” The so called superior homes didn’t get their prices on their own merits–it started from the bottom. What goes up must come down–I think it’s reasonable to expect that when the scaffolding goes down, so will the houses that rest upon it. I don’t see an immunity gap, which is what someone who makes in a living in RE would want to see.
What I love about this blog site is that it is active (who wants to wait 2 weeks for someone to follow up with their comments), and you get a good mix of viewpoints.
