In San Diego from approx 1991 to 1997:
• Property values decline slowly month after month, year after year until value is less in 1997 than in 1989 (SD median down ~20%, LA down ~ 25%, actuals – not adjusted for inflation)
• No increase in traffic on freeways during this time
• Regularly see loaded U-Haul trailers heading out of SD
• Unable to raise rents on income property due to low demand
• REOs set the market value in almost every neighborhood
• Eager contractors readily available for a reasonable price
• Estimated 500,000 jobs lost in SoCal, SD unemployment > 8%
• 90s economic downturn is 2nd only to the Great Depression
It seems most people don’t know (or forget) just how bad the 90s downturn was – caused by the loss of previously good paying, military-related jobs IMO. Unless unemployment returns to 8% range you won’t see the overall economy as bad this time, again IMO. What’s unique in this recent real estate price run-up is the unbelievable speculation, cheap money, no-qual loans and mortgage fraud. Real estate is due for a correction… 20 – 25%??
