I wrote (only about a quarter jokingly) in a previous post (in May – http://piggington.com/i_finally_bought_a_house_in_carmel_valley_prices_there_will_now?page=1 )that, now that I’d bought a house, I thought that prices would head down. Here were my reasons then:
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1. Shadow inventory
2. Unemployment
3. Limited supply of Asians willing to pay anything for good schools (like my wife).
4. Interest rates almost have to go up from here.
5. End of tax rebates (Fed recently, CA soon).
6. Fall/Winter
7-9. A few more I can’t think of right this second.
10. MAINLY, because, after 5 years of waiting for CV prices to fall, I gave up and bought.
I’d have actually preferred to wait, but this lot was so fantastic and unique, I didn’t want to pass it up.
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I gave up guessing how much the government will do and how much effect it will have. I’m a little less bearish on CV now than I was then. Prices seem to be holding pretty steady so far. But that doesn’t necessarily mean they’ll continue to hold. So, I don’t know. But if they do continue to decline, I think it will probably be slowly and not by much. I waited five freaking years and they dropped very little in that time.
It’s a tough call. I mean, if you knew for sure they’d drop a total of 8% over the next three years, that’d probably be worth it. You’d save $70,000 or $80,000. But that’s probably the max it would drop. It might not drop at all. Then you’ve waited for nothing. If they go up (unlikely but possible), now you’re probably angry.
At the time (in May), if it weren’t for that one house that we wanted, I’d have waited. Now, with prices holding almost steady for yet another year, I’m not so confident that they’ll continue down. In my opinion, CV is still one of the “overvalued” areas of San Diego. But that doesn’t necessarily mean that prices will come down.
