In 2001 I piad 260k for a below average 1300 sqft. house in Vista that I sold in 2004 and is now comp’d at 525k. The economy has been smokin for a while and rates are still low, but homes sales there are dead. There are simply no economic factors left to improve to reinvigorate sales because everything is still going great, and yet prices are falling! Knock down one or more of these pillars – interest rates, exotic loans, optimistic buyer psychology (50% still think it is a good time to buy!),low unemployment, great economy – and a return to 2001 prices is more than likely IMO. Even at 260k that house is overpriced.
