I’ve only got time to comment on one of your errors. You say that, “Almost ALL single family homes purchased in the 750,000+ price bracket in San Diego county were purchased by the primary resident who is currently living in and occupying that home. This market is NOT being driven by a bunch of speculators who are hoping to sell to the greater fool.” You say this as though the two are mutually exclusive. They’re not.
You see, the only reason many of those primary residents are willing to pay so much for those single family homes is that they’re hoping to eventually sell them to the greater fool. If joe six pack can rent a house for $2500/month, but it costs him $5,000/month to buy the same house, why would he buy it? Because he’s got an unreasonable expectation of appreciation. Because he’s hoping to (someday) sell it at a much higher price to a greater fool. A “speculator” isn’t neccessarily the same as a flipper. All flippers are speculators but all speculators aren’t flippers. A guy who pays twice as much as he needs to to live in a house is speculating on that house appreciating. And if that guy borrowed 10x his income using an option ARM, and he counted on being able to refinance after his house appreciated in price, then not only will his speculation be wrong, but he’ll be selling his house soon. And he’ll be quite motivated.
