With respect to the La Jolla area, I’d say the truth lies somewhere in the middle. Yes, values did decline significantly, but I think if you used house-to-house comparisons you’d probably see it wasn’t 50%.
I was appraising throughout that entire time period (though admitedly, not a lot of houses) and I’d have pegged it at 35% or perhaps a touch more in La Jolla. There were a few market segments that lost 40% in pricing during the last bust. Enough so that I often wonder why that dip is commonly characterized as being limited to 15%. Based on my experience, -15% off the peak was the exception, not the rule.
As for personal wealth, I think it’s important to take note of how much of that wealth is in the form of RE money or Stock money that is subject to catastrophic losses. Our region has not created that many businesses that are not related to RE or directly benefitted from RE equity. I think that when RE declines, the number of wealthy people will decline at a disproportionate rate; i.e., the percentage of wealthy people will decline faster and farther than the percentage of sales prices. And the stock market may not be the haven people seem to think it is.
