I know most of the readers here focus on San Diego but I would like to share an observation from a little bit North in the LA area (but still Southern California).
There was a big graphic on the front page of the LA Times on 9/13/07 showing a map about how the housing market is fairing. As you can imagine the article was about the low home sales in August.
The graphs and article are also in the on-line article.
The article brought out some interesting information that I think is applicable to all of SC including San Diego (although the graphics don’t include SD County)
One concept was the median price still increasing:
Surprisingly, the median price of a home in Southern California rose last month to $500,000 — up 2.7% over August 2006. In Los Angeles County, the median price rose 5.8% to $550,000, although sales sank 34.4%.
Analysts said increases in the median price — the point at which half the homes sell for less and half for more — were driven mainly by rising prices and healthier sales in affluent areas such as Bel-Air and on Orange County's so-called Gold Coast, where newfangled mortgages didn't play as big a role during the boom.
Median price in Bel Air went up 97% to $1.725M
Another is the concept of what builders are doing to move inventory:
After booking record profit and sales this decade, builders are struggling to unload their inventories and are working mightily to entice buyers with incentives including free trips and plasma TVs. Some are offering outright price discounts.
…Irvine-based Standard Pacific Corp., is hosting the equivalent of a car dealership "blowout" sale at Hsii's community and 48 others starting Friday. The company's goal: sell 200 homes in 10 days by offering mortgage loans with rates of less than 6%, along with other carrots.
A follow up article in today’s paper says the first day of the “blowout” didn’t attract much attention.
But I guess that some people will still try to pay the for the over priced houses because they think they are getting a good deal with all the incentives even if they can’t pay the mortgage down the road.
Heck, there is a small group of houses near where I work where the builder is offering a Toyota Prius.
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