We are kind of intertwining two different threads but nothing wrong with that. On page 1 of this thread waiting hawk commented about big chunks happening if a macro event such as a recession occurs. I think we all concur on that point. If there is some sort of catalyst that either sharply erodes buying power, confidence, etc… then yes we will see big chunks throughout the desireability spectrum. Without it, we will see the slow roll down.
Now in the other San Marcos thread PW commented on realtors, appraisers looking back instead of forward to help people price. I guess to everyone has thier own methods. My statement would be that when I sit down with people at a listing appointment it is not just a look back. Yes we look at previous sales but today a seller has to be made aware of the trend of THAT PARTICULAR neighborhood. A listing in Lakeside has to know what is going on in Lakeside not Carlsbad. A listing in La Costa Valley does not care what is happening in San Carlos. The micro markets differ much more wildly then people acknowledge thus pricing recommendations will vary as well.
I guess my point is that instructing a seller of the prevailing trend in the neighborhood, challenges of appraisals, and market conditions in the neighborhood is just as important, if not more important then comps.
The biggest challenge is GETTING THEM TO LISTEN!! I am telling you guys it is really hard. Those that do listen often see a sale in a relatively quick time. Could they perhaps have left some money on the table? Of course…. yet they are the ones who don’t get caught in the depreciation slide. They jumped on the lifeboat and are on the way to safety!
Like a damn breaking, price declines in a given neighborhood happen with singular events right, small leaks? Maybe a foreclosure or a distressed sale, then another, then more and more, then non distressed sellers having to react because the volume is great enough. This progression takes time and is fueled by recursion of multiple sales repeating the event.
I don’t think that I look back as you are saying… doubtful that sdr does either. I think our point is that it is easy to point out the declines of the singular events AND it is easy to point out why things should decline. Of course they should decline! The market sucks, the homes were over valued, the lenders are tightening up, the CDO market is all but dead, the economy is grim… Jeez it is like fishing for trout in a barrel…
The hard part that confounds people is, why are there still sales out there? Why are people still buying and paying pretty darn high prices for homes in CV and LCV and 4S? Why are those markets taking so long? This sort of activity is why someone like myself (and I think sdr) comment in the ways that we do. It is not to refute facts of the downturn or the depreciation, it is to just point out that in some cases demand is still there, (yes it is diminished from the peak) but because it is still there it props things up…
It is not a case of looking backward, it is a case of analyzing the present…My post is not to advocate the market or tow the line. It is to just try to explain what is happening or continuing to happen. Can it be disrupted? Absolutely. In the absence of nothing catastrophic will declines occur. Yepp…At what rate? It will vary by the neighborhood…
