The ratio of available inventory to sales in the 92067 zip areas prior to the fires was way excessive, like 14 months worth of inventory. Now it’s just excessive. Assuming that none of the 66 homes were to be rebuilt and all of those owners just went out and bought new homes the inventory would drop by 50% but you’d still have 7+ months of inventory sitting there, as well as a huge jump in readily buildable lots.
In the long run the prices in those areas are relational to the lesser areas throughout the county. The $3million home in RSF is judged by the market to be 600% better than the $500k home in Mira Mesa. If the MM home ends up dropping to $400k the RSF home isn’t going to somehow magically become 750% better just because it’s RSF. In fact, based on what I saw during the last bust, the spread on the RSF homes is more likely to compress to 500% x MM than stay at 600%.
About the only way I could see it would make sense (strictly from an economic standpoint) to buy now would be if you thought the market would bottom out in the next 2 years and the overall price declines in that area didn’t exceed 10% or even 15%. The idea of walking away from your entire downpayment – at least for awhile – is worthy of some consideration.
FWIW, I applaud the fact that you spent some time considering the ethical ramifications. There are lots of people in this world who would view this strictly in terms of the opportunities involved. And in my view our society is the worse for that.
