I don’t think we disagree much, but I do like to clarify a couple of things.
My flat price comment was in the context to show that a 14 year appreciation of 100% is not totally unreasonable when taking inflation into account. I actually stated twice that I expected CV prices to decline.
I also didn’t say the decline would be small, but *relatively* small. If San Diego county has declined 15% so far into the cycle and CV only declined less than 10%, then that is relatively small.
I have no idea how much CV prices will fall. The 20% was just a guess. The CV is a upper-middle class community (annual gross income at least 200K). People with that kindof income can support a million dollar house after 20% down, given the current interest rates. More importantly there seems to be more people that fit this profile than the houses available even in today’s market. Want proof? Just look at the interests on this 1.5 million REO house. As soon as people smell a deal, they jump on it. If this is happening a few years back when the market was still hot, I wouldn’t be surprised, but everybody in their right mind should know by now that there is a real estate bubble going on and prices have dropped. So you’ve got to ask yourself what is really motivating these people to buy today and perhaps adjust your expectations accordingly. Also ask yourself now that real estate has turned bearish, are people buying a house to flip or are they buying a place to live.
