Notice the Del Mar drop of 27.3%! Now, I thought that the superior high-end was “insulated” because rich people had staying power. Oh, rich owners and buyers are affected by what they read in the press too. What a surprise! “Jelley blamed a slowing market on news media concentration on local real estate’s downward trend.”
I’m too lazy to look at 1990s data, but I think that the high-end will drop even more than the low-middle range.
“We have so many fewer buyers than inventory – we’re totally over-inventoried,” she said. “I can’t understand why everybody in the world isn’t buying . . . . They should get off the fence and make it happen.”
“I’m too lazy to look at 1990s data, but I think that the high-end will drop even more than the low-middle range.”
That did happen during the 1990s and I expect it to happen again. I refer to it as price compression where the price structure not only declines as a whole but the range contracts with the middle and upper ranges showing more loss by both price and percentage than the lower end.
Realistically, how many $900k+ tract homes does this region need?
The price compression Bugs describes won’t show up in the median price by zip codes because as people buy the higher end houses, the median will hold or even increase. That’s what I think is happening in Escondido, Poway and Golden Hill (as mentioned the article). Say that some Poway houses that used to be $1 million resell for $600k. Those houses would actually cause the median to increase! The 40% drop would be invisible to the people who solely look at the stats and would not be reported in the press. If you’re a buyer, you have to look sale price history of individual houses.
In my mind, if you can buy a nice house in Del Mar for $1.3 million, why would you even consider similarly priced houses in less desirable Poway, Scripps Ranch or Carlsbad?
I expect the million dollar suburban tract houses to drop like a rock. Anyone wants a bargain McMansion to match that bargain SUV?
This median business is really misleading as Rich has described earlier. I imagine that many people are feeling good this morning that prices are only down a little bit overall, and even up in a couple areas. If I lived in San Marcos, for example, I would have no idea that there is a fire sale going on in San Elijo, that there are countless neighborhoods where prices are down 10-20% and are not selling, and that there are others with multiple foreclosures. I can point to one home in Silvercrest in San Marcos where a home is discounted to 589k; the most recent 2 x comps are 715k and 725k! Another in Santa Fe Hills comps at 650k and is discounted to 550k.
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