I did an appraisal on a home this week in the Bonita Long Canyon / Rialto area that is going to be a short sale of $300,000+. It sold in 2005 for $1,200,000, with an 80/20 loan, It's now in the foreclosure process, but it's selling now as a short sale for just under $900,000. What I've noticed in the last several months, is that I'm surprised how relatively stable the market seems in some areas, like parts of Carmel Valley, Scripps Ranch, La Jolla, Rancho Bernardo, and Rancho Penasquitos. I'm also surprised at how horrible things are in other areas, specifically Eastlake and Otay Ranch. And the market is so bad in parts of Riverside County, like Perris and Lake Elsinore, that there really aren't any words to adequately describe it.
It's pretty easy to explain this. There hasn't been enough price differentiation yet in house prices. There are some areas where it just doesn't make sense for home prices to be above a certain level no matter how big, how upgraded, etc.
$900k for a home in the boonies isn't nearly the same thing as $900k inland in for example Rancho P, Rancho B, or CV. I think it’s a lot to do with the income levels of the home owners where they are buying. Statistically, people living in the boonies, or in temecula, otay, etc probably aren’t the higher income earners that have the financial means to sustain a 800-900k home/
Also, newer areas bordering sketchy neighborhoods are also an issue. The Otay Ranch area doesn't surprise me one bit. Look around the area outside of the new development. Chula Vista isn't an area necessarily known for it's great schools and high income earners. I wouldn’t live there even though the immediate neighborhood is nice, just because of the surrounding. If I really needed a home, I’d rather stretch and buy something in a better surrounding.
All the housing issues are going to start hemorraging in these outlyer ereas first, and then depending on how long this correction lasts, starting moving into the more desirable locations. We're already seeing the fallout from Temecula… It wouldn't surprise me if Oceanside get hit pretty bad soon (if not already). Sorry, don't follow oceanside. It also doesn’t surprise me that a lot of the fraud happened in the outlyer areas, as statistically the less financially savy are the ones usually the easiest to be taken advantage of.
Very interesting graphs. In 2006 we had about the same inventory but prices didn’t go down until the Fall. In all of 2007 prices have been trending down. Also note that in Sept 06 inventory started to decrease but in Sept 07 inventory keeps going up.
