I think there could easily be some markets that drop 50% and others that may only drop 20%. Some areas were much hotter than others in SD. The highs also took place at different times. I had a house in Ramona. It looks like the peak there might have been late spring 2005. We have friends in Rancho Bernardo and their house peaked in late spring and has fallen from 650k to 590K already. Prices in Coronado peaked August/September while it looks like prices in Imperial Beach peaked later than that.
I know of a guy in Coronado who is trying to sell his house for 2.6M. I know for a fact that he had an offer in August that was only 20K away from his asking price. He walked away. His house has been empty since last summer and he has had to pay mortgage and prop taxes for an additional 9 months because of 20K difference. His house has been for sale for a year.
I know of another house that has been for sale since at least Jan 2005. They started out asking 3.2M. Then they raised it it to 3.4M. Then they raised it to 3.6m – 4.2M. Yesterday there was an addition to to the for sale sign – REDUCED.
How low are these houses going to go? How many people can afford 2.5M for a house? Not many. The smaller your pool of buyers, the riskier it gets.
