[quote=pemeliza]The other thing I remember from the mid 90’s is that a lot of my friends hated real estate because they bought condos in UTC and were down big on them. Some of them sold at a loss and bought bigger houses in areas like the Ranch in Carlsbad. Pretty smart moves in hindsight.[/quote]
LoL! Yep, with 20/20 hindsight buying low and selling high is a smart ‘strategy’. I should start that tomorrow! In truth, 1996 was clearly below trend, so even then it was clearly not a bad time to buy, just as 2006 was clearly not a a bad time to sell. Of course, no one at that time knew the exact top or bottom of the market, just that prices were above or below trend by a certain amount.
As for your comment about dramatic physical changes in areas since 1996, yes, that’s right. [I think I am even older than you, ancient pemeliza.] And that could make it hard to judge overall price levels. However, the best way to measure overall price changes is by comparing prices of those homes that haven’t changed much (except normal levels of homeowner improvement and maintenance) in areas that haven’t changed much. I don’t know San Diego all that well, but I imagine La Jolla, Rancho Santa Fe, along with quite a few less expensive areas would qualify. My knowledge is based more on LA and OC, although I think my comments about prices in 1996 versus peak versus today apply reasonably well to SD also.
In any case, I didn’t mean to be argumentative. Some people will want to see real estate as a one-way escalator, a money machine, that needs only sufficient patience to throw off profits. Prices that never return to prior inflation-adjusted lows are part of that view of the world. None of us knows yet if that view is correct. I think it is pretty obvious that without extraordinary artificial govt price supports, prices would already have dropped through inflation-adjusted 1996 levels. It’s hard to know where the wind will blow us eventually when all the powers of govt are blowing in one direction. Mr Bernanke and Mr Geithner, with a few close friends in Congress, and not Mr Market, determine next year’s house prices.
