I’m expecting 1998 prices pretty much across the board – all areas of town, all property types
I am hoping for lower prices (the overshoot Bugs mentions) but this may only happen on selected areas or property types
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I think even real estate bears are hesitant to talk about 70% declines in public – as you have pointed out Bugs, we have friends and family who will be hurt by this housing correction so we might filter what we say out loud
When I was selling property and the buyer asked why, I would say “I’m expecting a correction and I believe it will be more than the typical 10-15%.”
This is an honest answer and it doesn’t put the other person on the defensive
I maintain a list of all the negatives facing the US economy going forward – when I look at this list it is easy for me to imagine 70% declines in real estate prices but along with the reduced prices comes a depression that will make the 1930s look like a summer holiday at the beach
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It makes sense to me that the market will find a bottom when rental quality houses are selling near rental value
This is when the investors will step in and buy
To me, this means a 3/1 SFR in Clairemont or North Park is worth no more than $275K (and probably only $225K)
I use ‘Clairemont at $275K’ as my starting point to consider prices in other areas
A view property in Bay Park / Bay Ho won’t cost more than twice the lower end house in Clairemont so I think these view properties will be available for $600K
View property in nicer areas (Mission Hills, Pt Loma, OB, Sunset Cliffs) will cost more but they won’t be twice what a view property in Bay Park is going for – this means there will be view properties in these nice areas for under $1 mil
