I think these houses were about $260K in 2000 when I just graduated from UCSD and made $50K/yr. Everyone was telling me to buy one. I thought buying a $260K home with my salary was stretching it so I didn’t. Another reason was during the 90’s prices stay almost flat so I didn’t expect house prices to balloon. As the price went up and I couldn’t afford it any longer, they kept telling me “I told you so man”. Admittedly, between 2003-2005,I regretted the decision of not buying in 2000.
I think $175K is too low, assumming inflation is 3.5% and home prices in 2000 were economically sound.
Then $260K x 1.035^7 = $331K (2007)
But I think it might not go down this low. It might goes to around $410-420K, stalls and let inflation catches up some times in 2009-2010.
