Any ideas how long it took last time?

[RightSide]

I’m actually interested in buying a house in San Diego county, so I’m hoping that the decline comes fast and quick, but I’m willing to be patient and wait for a reasonable entry point.

Rich, have you done any studies on how fast the pendelum turned on San Diego’s recent booms and busts? I would be interested to see some data on that and extrapolate it to our current conditions.

Also, another indicator that I think would be interesting for your housing report (which I eagerly await each month and enjoy immensely btw), is a look at the average “days on market” for the current inventory and how this would appear from my own anectodal observations to be growing rapidly.

Some of the neighborhoods that I was scoping out on the MLS, have many houses that have been on the market for over 100 days and have had mulitple price reductions. I imagine that the longer your house doesn’t sell, the more worried you get, and that utlimately the self-feedback look that has helped pushed prices up is going to play a big factor in helping push the prices back down on the other side of this bubble.

-Michael (up here in rainy Seattle, sorely missing the San Diego sun.)

[San Diego]

The last bust happened when Interest Rates were in double digits and their were huge jobs losses because of a decrease in military spending.

What is your definition of a “reasonable entry point”? If someone bought a SFR in Carmel Valley for $500,000 in 1998 and recently had it on the market for $1.3 million but ends up selling it for $990,000, is that a “reasonable entry point”?

[RightSide]

Actually, nominal interest rates were in double digits, but I don’t beleive real interest rates were that different then they are today. (Quck econ lesson, if inflation is 10% and the nominal interest is 12%, then real interest rates are 2%)

In any case, my question was regarding the characteristics and time duration of the last couple of busts. How long did prices take to from point a down to point b once the uptrend stalled? (Anyone know where this data might be available?)

My defination of a reasonable entry point is not based on price action, but on relative price to median income. Rich has some great charts showing how houses are currently trading at 15x median income, when the historic average has been around 8. When prices get closer to that reality, then I think they will be more sustainable and thus reasonable.

-Michael

[teatsonabull]

Reasonable entry point is about 50-55% of the highest price the house sold for here in San Diego during this frenzy.

Impossible you say! Well, this is where we were a mere 4-5 years ago before this phony “expansion” really hit it’s stride.

[Wickedheart]

Zip Realty lists inventory and days on the market. You can also see the price reductions on homes, very enlightening. It’s been quite an eye opener for me. I’ve been tracking the 92123 zipcode and I see many properties with multiple reductions.

[lewman]

Past housing price data can be found on the Chicago Mercantile Exchange. It goes back to the 70s so you can get a feel of what happened through several cycles in the past.

http://www.cme.com/trading/prd/env/housingover16250.html

[Wickedheart]

No, I’ve only seen the days on market for individual listings. Sorry I can’t help.

[Author]

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