I’m not saying that a $475k house will be going for $500k. What I’m saying is that I’ve been watching the market there since pre-bubble (it’s where I plan to retire), and for the past year I’ve been looking on Redfin every few weeks and looking at the sales history. The houses that went for $300-400k (the range I’m looking at) in the late 90’s were going for $900+ at the peak, and they’re going for $700-800k now.
At the peak, there were plenty of people willing to pay $900k+, but that didn’t stop prices from dropping since then. I realize there are plenty of people willing to pay $700k now, but that still won’t stop prices from dropping even further, like to $500k, because the downward pressure far exceeds any perceived desirability keeping prices inflated (a desirability which hasn’t changed since the late 90’s). That kind of price change is entirely within reason considering the size of the bubble, it would match past trends, and still leave a significant premium over inland property. That’s my informed opinion, but I guess we’ll have to wait a few years to see who’s right 🙂
The bubble popped in places like Temecula. It’s slowly deflating on the coast.
