Slow decline or is a big chunk about to be ripped out?

[sdrealtor]

Doesnt seem like there is much worthwhile to talk about around here so I thought it would be cool to revisit a legendary historic thread and update it. Here’s where we started and I follow it up with another post as to what actually happened:

The Original Post:

On a couple threads there has been some back and forth about what is coming in the next few months. Admitting I am in the long and painful decline camp with SD R and a few others. On the other side we have those that believe a large chunk of pricing (10% or more) is about to be taken out of the market quickly (LS2008, Rustico etc.). I’m not married to my opinion but beleive what I do based upon what I see in the markets I generally follow. Here’s my case:

Closed sales figures for the 1st 5 months of 2007 vs. prior years for Coastal SD from Point Loma through Carlsbad show that volume is not declining there.

2004-1489
2005-1432
2006-1218
2007-1241 (still more late reporters coming)

Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).

2004 2,684 sq ft $1,072,428 ($400/sq ft)
2005 2,624 sq ft $1,176,811 ($448/sq ft)
2006 2,703 sq ft $1,252,146 ($463/sq ft)
2007 2,696 sq ft $1,199,774 ($445/sq ft)

I only have inventory for a couple ZIP that I follow closely but it is way down vs. last year in these areas.

My problem stems from my inability to see how a pricing collapse would happen administratively. I just dont see people with equity dropping their acceptable prices form 850K to 750K or from 600K to 500K. I dont see the lenders doing it either with inventory levels where they are. I’m not saying it’s can’t happen, I would just like to here some theories as to how it could play out over the next 6 months so we can all kick them around.

[sdrealtor]

Its important to remember that this was all before the credit collapse in Aug 2007. I honestly did not know what the numbers would look like until I ran them but 2 years later the verdict is in.

2004-1489
2005-1432
2006-1218
2007-1247
2008-885
2009-754
2010-TBD

Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).

2004 2,684 sq ft $1,072,428 ($400/sq ft)
2005 2,624 sq ft $1,176,811 ($448/sq ft)
2006 2,703 sq ft $1,252,146 ($463/sq ft)
2007 2,558 sq ft $1,178,553 ($468/sq ft)
2008 2,597 sq ft $1,193,847 ($464/sq ft)
2009 2,490 sq ft $997,868 ($410/sq ft)

Verdict:
sdr-prediction for next 6 months to a year intact. Little changes in price but large decline in volume most likely due to lack of jumbo financing alternatives.

Russell-a year later gets some satisfaction with a 12% decline in $/sq ft amidst even lower volume most likely due to the continued lack of jumbo financing.

Have at it piggies! Any guess what the 2010 numbers will look like?

[sdrealtor]

Its important to remember that this was all before the credit collapse in Aug 2007. I honestly did not know what the numbers would look like until I ran them but 2 years later the verdict is in.

2004-1489
2005-1432
2006-1218
2007-1247
2008-885
2009-754
2010-TBD

Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).

2004 2,684 sq ft $1,072,428 ($400/sq ft)
2005 2,624 sq ft $1,176,811 ($448/sq ft)
2006 2,703 sq ft $1,252,146 ($463/sq ft)
2007 2,558 sq ft $1,178,553 ($468/sq ft)
2008 2,597 sq ft $1,193,847 ($464/sq ft)
2009 2,490 sq ft $997,868 ($410/sq ft)

Verdict:
sdr-prediction for next 6 months to a year intact. Little changes in price but large decline in volume most likely due to lack of jumbo financing alternatives.

Russell-a year later gets some satisfaction with a 12% decline in $/sq ft amidst even lower volume most likely due to the continued lack of jumbo financing.

Have at it piggies! Any guess what the 2010 numbers will look like?

[sdrealtor]

Its important to remember that this was all before the credit collapse in Aug 2007. I honestly did not know what the numbers would look like until I ran them but 2 years later the verdict is in.

2004-1489
2005-1432
2006-1218
2007-1247
2008-885
2009-754
2010-TBD

Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).

2004 2,684 sq ft $1,072,428 ($400/sq ft)
2005 2,624 sq ft $1,176,811 ($448/sq ft)
2006 2,703 sq ft $1,252,146 ($463/sq ft)
2007 2,558 sq ft $1,178,553 ($468/sq ft)
2008 2,597 sq ft $1,193,847 ($464/sq ft)
2009 2,490 sq ft $997,868 ($410/sq ft)

Verdict:
sdr-prediction for next 6 months to a year intact. Little changes in price but large decline in volume most likely due to lack of jumbo financing alternatives.

Russell-a year later gets some satisfaction with a 12% decline in $/sq ft amidst even lower volume most likely due to the continued lack of jumbo financing.

Have at it piggies! Any guess what the 2010 numbers will look like?

[sdrealtor]

Its important to remember that this was all before the credit collapse in Aug 2007. I honestly did not know what the numbers would look like until I ran them but 2 years later the verdict is in.

2004-1489
2005-1432
2006-1218
2007-1247
2008-885
2009-754
2010-TBD

Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).

2004 2,684 sq ft $1,072,428 ($400/sq ft)
2005 2,624 sq ft $1,176,811 ($448/sq ft)
2006 2,703 sq ft $1,252,146 ($463/sq ft)
2007 2,558 sq ft $1,178,553 ($468/sq ft)
2008 2,597 sq ft $1,193,847 ($464/sq ft)
2009 2,490 sq ft $997,868 ($410/sq ft)

Verdict:
sdr-prediction for next 6 months to a year intact. Little changes in price but large decline in volume most likely due to lack of jumbo financing alternatives.

Russell-a year later gets some satisfaction with a 12% decline in $/sq ft amidst even lower volume most likely due to the continued lack of jumbo financing.

Have at it piggies! Any guess what the 2010 numbers will look like?

[sdrealtor]

Its important to remember that this was all before the credit collapse in Aug 2007. I honestly did not know what the numbers would look like until I ran them but 2 years later the verdict is in.

2004-1489
2005-1432
2006-1218
2007-1247
2008-885
2009-754
2010-TBD

Here is the averages represented by these sales (i.e. average size, selling price and price/sq ft).

2004 2,684 sq ft $1,072,428 ($400/sq ft)
2005 2,624 sq ft $1,176,811 ($448/sq ft)
2006 2,703 sq ft $1,252,146 ($463/sq ft)
2007 2,558 sq ft $1,178,553 ($468/sq ft)
2008 2,597 sq ft $1,193,847 ($464/sq ft)
2009 2,490 sq ft $997,868 ($410/sq ft)

Verdict:
sdr-prediction for next 6 months to a year intact. Little changes in price but large decline in volume most likely due to lack of jumbo financing alternatives.

Russell-a year later gets some satisfaction with a 12% decline in $/sq ft amidst even lower volume most likely due to the continued lack of jumbo financing.

Have at it piggies! Any guess what the 2010 numbers will look like?

[IT.MOM]

Which zip codes are included in the data? Those houses hold on to their values pretty well (compare to most other areas)

[IT.MOM]

Which zip codes are included in the data? Those houses hold on to their values pretty well (compare to most other areas)

[IT.MOM]

Which zip codes are included in the data? Those houses hold on to their values pretty well (compare to most other areas)

[IT.MOM]

Which zip codes are included in the data? Those houses hold on to their values pretty well (compare to most other areas)

[IT.MOM]

Which zip codes are included in the data? Those houses hold on to their values pretty well (compare to most other areas)

[sdrealtor]

The ZIPs I used include all the prime coastal towns – Point Loma, Ocean Beach, Pacific Beach, La Jolla, Del Mar, Carmel Valley, Solana Beach, Cardiff, Encinitas and Carlsbad. I excluded RSF because the prices are so much higher that they skew the data.

[sdrealtor]

The ZIPs I used include all the prime coastal towns – Point Loma, Ocean Beach, Pacific Beach, La Jolla, Del Mar, Carmel Valley, Solana Beach, Cardiff, Encinitas and Carlsbad. I excluded RSF because the prices are so much higher that they skew the data.

[sdrealtor]

The ZIPs I used include all the prime coastal towns – Point Loma, Ocean Beach, Pacific Beach, La Jolla, Del Mar, Carmel Valley, Solana Beach, Cardiff, Encinitas and Carlsbad. I excluded RSF because the prices are so much higher that they skew the data.

[sdrealtor]

The ZIPs I used include all the prime coastal towns – Point Loma, Ocean Beach, Pacific Beach, La Jolla, Del Mar, Carmel Valley, Solana Beach, Cardiff, Encinitas and Carlsbad. I excluded RSF because the prices are so much higher that they skew the data.

[Author]

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