The “bottom” for various neighborhoods in SD

[SD Realtor]

Downtown is gonna be hurting downtowner….You should see 250-275 a sf when it hits rock bottom.

SD Realtor

[an]

SD R, I completely agree with you. Interest rate will make a huge difference in where the bottom is. People like to toss out price vs rent multiple and such, but if inflation and rates goes through the roof, we could very well see 98-99 price again, which would be the same as 88-89 price. Can you imagine 20 years of flat prices?

[an]

SD R, I completely agree with you. Interest rate will make a huge difference in where the bottom is. People like to toss out price vs rent multiple and such, but if inflation and rates goes through the roof, we could very well see 98-99 price again, which would be the same as 88-89 price. Can you imagine 20 years of flat prices?

[an]

SD R, I completely agree with you. Interest rate will make a huge difference in where the bottom is. People like to toss out price vs rent multiple and such, but if inflation and rates goes through the roof, we could very well see 98-99 price again, which would be the same as 88-89 price. Can you imagine 20 years of flat prices?

[an]

SD R, I completely agree with you. Interest rate will make a huge difference in where the bottom is. People like to toss out price vs rent multiple and such, but if inflation and rates goes through the roof, we could very well see 98-99 price again, which would be the same as 88-89 price. Can you imagine 20 years of flat prices?

[an]

SD R, I completely agree with you. Interest rate will make a huge difference in where the bottom is. People like to toss out price vs rent multiple and such, but if inflation and rates goes through the roof, we could very well see 98-99 price again, which would be the same as 88-89 price. Can you imagine 20 years of flat prices?

[Eugene]

there are buyers who have the money to buy an expensive house without needing to sell first. But, these buyers are in the minority. Most transactions are either “entry-level” or “near entry-level” or upgrades. SD Reator & sdrealtor, am I right ?

I don’t think there’s much vertical movement in the RE market. For sure there is some. But people don’t move up often and don’t move up by much. To move up, you need a lot of savings, equity, or appreciation. All that takes very long time to build up.

Most of resale dynamics is more or less sideways (getting a new job in a different part of town, moving from 3br to 4br in the same neighborhood). In most areas prices are set by new buyers rather than move-up buyers. For example, Carmel Valley market is more of a market for new homebuyer engineers from Sorrento area biotech companies, than a market for 40-something teachers from Clairemont with lots of equity.

Contagion will work its way upward but for a different reason.

Suppose that equilibrium prices in Carmel Valley are 50% higher (per square foot) than in Mira Mesa. On the way up, if MM appreciates and it brings MM-CV price differential down to 20%, people in the right income bracket for Mira Mesa will start stretching their finances and entering competition for CV houses. Conversely, on the way down, as the supply of lower-income borrowers in MM dries up, price differential will increase. At some point a new homebuyer, who in 2005 would’ve bought a house in CV without hesitation, will look across the canyon and decide that he sees very attractive prices, that he could always use some savings, and that MM isn’t that bad after all. He’ll go ahead and buy a house in north Mira Mesa and spend some of the savings on a two-week trip to Tahiti. Some homeseller in CV will be left without a buyer and he will have to wait (inventory up) and eventually cut prices.

During the boom we had a good deal of “compression” of home prices. The ratio I used as an example (Carmel Valley to Mira Mesa) went down 20%. Right now we seeing massive unwinding of this compression. CV-MM price differential is ALREADY back to 2000 levels. From this point on further low-end declines will probably translate into a drag on higher-end markets.

[Eugene]

there are buyers who have the money to buy an expensive house without needing to sell first. But, these buyers are in the minority. Most transactions are either “entry-level” or “near entry-level” or upgrades. SD Reator & sdrealtor, am I right ?

I don’t think there’s much vertical movement in the RE market. For sure there is some. But people don’t move up often and don’t move up by much. To move up, you need a lot of savings, equity, or appreciation. All that takes very long time to build up.

Most of resale dynamics is more or less sideways (getting a new job in a different part of town, moving from 3br to 4br in the same neighborhood). In most areas prices are set by new buyers rather than move-up buyers. For example, Carmel Valley market is more of a market for new homebuyer engineers from Sorrento area biotech companies, than a market for 40-something teachers from Clairemont with lots of equity.

Contagion will work its way upward but for a different reason.

Suppose that equilibrium prices in Carmel Valley are 50% higher (per square foot) than in Mira Mesa. On the way up, if MM appreciates and it brings MM-CV price differential down to 20%, people in the right income bracket for Mira Mesa will start stretching their finances and entering competition for CV houses. Conversely, on the way down, as the supply of lower-income borrowers in MM dries up, price differential will increase. At some point a new homebuyer, who in 2005 would’ve bought a house in CV without hesitation, will look across the canyon and decide that he sees very attractive prices, that he could always use some savings, and that MM isn’t that bad after all. He’ll go ahead and buy a house in north Mira Mesa and spend some of the savings on a two-week trip to Tahiti. Some homeseller in CV will be left without a buyer and he will have to wait (inventory up) and eventually cut prices.

During the boom we had a good deal of “compression” of home prices. The ratio I used as an example (Carmel Valley to Mira Mesa) went down 20%. Right now we seeing massive unwinding of this compression. CV-MM price differential is ALREADY back to 2000 levels. From this point on further low-end declines will probably translate into a drag on higher-end markets.

[Eugene]

there are buyers who have the money to buy an expensive house without needing to sell first. But, these buyers are in the minority. Most transactions are either “entry-level” or “near entry-level” or upgrades. SD Reator & sdrealtor, am I right ?

I don’t think there’s much vertical movement in the RE market. For sure there is some. But people don’t move up often and don’t move up by much. To move up, you need a lot of savings, equity, or appreciation. All that takes very long time to build up.

Most of resale dynamics is more or less sideways (getting a new job in a different part of town, moving from 3br to 4br in the same neighborhood). In most areas prices are set by new buyers rather than move-up buyers. For example, Carmel Valley market is more of a market for new homebuyer engineers from Sorrento area biotech companies, than a market for 40-something teachers from Clairemont with lots of equity.

Contagion will work its way upward but for a different reason.

Suppose that equilibrium prices in Carmel Valley are 50% higher (per square foot) than in Mira Mesa. On the way up, if MM appreciates and it brings MM-CV price differential down to 20%, people in the right income bracket for Mira Mesa will start stretching their finances and entering competition for CV houses. Conversely, on the way down, as the supply of lower-income borrowers in MM dries up, price differential will increase. At some point a new homebuyer, who in 2005 would’ve bought a house in CV without hesitation, will look across the canyon and decide that he sees very attractive prices, that he could always use some savings, and that MM isn’t that bad after all. He’ll go ahead and buy a house in north Mira Mesa and spend some of the savings on a two-week trip to Tahiti. Some homeseller in CV will be left without a buyer and he will have to wait (inventory up) and eventually cut prices.

During the boom we had a good deal of “compression” of home prices. The ratio I used as an example (Carmel Valley to Mira Mesa) went down 20%. Right now we seeing massive unwinding of this compression. CV-MM price differential is ALREADY back to 2000 levels. From this point on further low-end declines will probably translate into a drag on higher-end markets.

[Eugene]

there are buyers who have the money to buy an expensive house without needing to sell first. But, these buyers are in the minority. Most transactions are either “entry-level” or “near entry-level” or upgrades. SD Reator & sdrealtor, am I right ?

I don’t think there’s much vertical movement in the RE market. For sure there is some. But people don’t move up often and don’t move up by much. To move up, you need a lot of savings, equity, or appreciation. All that takes very long time to build up.

Most of resale dynamics is more or less sideways (getting a new job in a different part of town, moving from 3br to 4br in the same neighborhood). In most areas prices are set by new buyers rather than move-up buyers. For example, Carmel Valley market is more of a market for new homebuyer engineers from Sorrento area biotech companies, than a market for 40-something teachers from Clairemont with lots of equity.

Contagion will work its way upward but for a different reason.

Suppose that equilibrium prices in Carmel Valley are 50% higher (per square foot) than in Mira Mesa. On the way up, if MM appreciates and it brings MM-CV price differential down to 20%, people in the right income bracket for Mira Mesa will start stretching their finances and entering competition for CV houses. Conversely, on the way down, as the supply of lower-income borrowers in MM dries up, price differential will increase. At some point a new homebuyer, who in 2005 would’ve bought a house in CV without hesitation, will look across the canyon and decide that he sees very attractive prices, that he could always use some savings, and that MM isn’t that bad after all. He’ll go ahead and buy a house in north Mira Mesa and spend some of the savings on a two-week trip to Tahiti. Some homeseller in CV will be left without a buyer and he will have to wait (inventory up) and eventually cut prices.

During the boom we had a good deal of “compression” of home prices. The ratio I used as an example (Carmel Valley to Mira Mesa) went down 20%. Right now we seeing massive unwinding of this compression. CV-MM price differential is ALREADY back to 2000 levels. From this point on further low-end declines will probably translate into a drag on higher-end markets.

[Eugene]

there are buyers who have the money to buy an expensive house without needing to sell first. But, these buyers are in the minority. Most transactions are either “entry-level” or “near entry-level” or upgrades. SD Reator & sdrealtor, am I right ?

I don’t think there’s much vertical movement in the RE market. For sure there is some. But people don’t move up often and don’t move up by much. To move up, you need a lot of savings, equity, or appreciation. All that takes very long time to build up.

Most of resale dynamics is more or less sideways (getting a new job in a different part of town, moving from 3br to 4br in the same neighborhood). In most areas prices are set by new buyers rather than move-up buyers. For example, Carmel Valley market is more of a market for new homebuyer engineers from Sorrento area biotech companies, than a market for 40-something teachers from Clairemont with lots of equity.

Contagion will work its way upward but for a different reason.

Suppose that equilibrium prices in Carmel Valley are 50% higher (per square foot) than in Mira Mesa. On the way up, if MM appreciates and it brings MM-CV price differential down to 20%, people in the right income bracket for Mira Mesa will start stretching their finances and entering competition for CV houses. Conversely, on the way down, as the supply of lower-income borrowers in MM dries up, price differential will increase. At some point a new homebuyer, who in 2005 would’ve bought a house in CV without hesitation, will look across the canyon and decide that he sees very attractive prices, that he could always use some savings, and that MM isn’t that bad after all. He’ll go ahead and buy a house in north Mira Mesa and spend some of the savings on a two-week trip to Tahiti. Some homeseller in CV will be left without a buyer and he will have to wait (inventory up) and eventually cut prices.

During the boom we had a good deal of “compression” of home prices. The ratio I used as an example (Carmel Valley to Mira Mesa) went down 20%. Right now we seeing massive unwinding of this compression. CV-MM price differential is ALREADY back to 2000 levels. From this point on further low-end declines will probably translate into a drag on higher-end markets.

[gdcox]

Graham

There is bound to be some vertical movement because people downsize after families or move away on retirement and younger people or those with growing families take their place.

Vertical is probably most significant for new houses . Toll Brothers are on record as saying sub-prime is hitting them in the rich sector because of the chains which reach right down to the cheapest segments.

[gdcox]

Graham

There is bound to be some vertical movement because people downsize after families or move away on retirement and younger people or those with growing families take their place.

Vertical is probably most significant for new houses . Toll Brothers are on record as saying sub-prime is hitting them in the rich sector because of the chains which reach right down to the cheapest segments.

[gdcox]

Graham

There is bound to be some vertical movement because people downsize after families or move away on retirement and younger people or those with growing families take their place.

Vertical is probably most significant for new houses . Toll Brothers are on record as saying sub-prime is hitting them in the rich sector because of the chains which reach right down to the cheapest segments.

[gdcox]

Graham

There is bound to be some vertical movement because people downsize after families or move away on retirement and younger people or those with growing families take their place.

Vertical is probably most significant for new houses . Toll Brothers are on record as saying sub-prime is hitting them in the rich sector because of the chains which reach right down to the cheapest segments.

[Author]

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