[bigmoneysalsa]

“IMO, there are many factors that can define what the “market” is, and that includes appraised price, assessed price, CMAs, AND the expert opinion of those in the real estate field. The market can’t be *just what buyers wish it was or want to pay, if that were true there would be quite a few areas of this country (SoCA, NYC, San Francisco, etc.) that would have very different real estate pricing than what we see now.”

No, sorry Laura, there is exactly one thing that defines a market: a willing buyer and a willing seller at a given price. Absolutely amazing! Reading laura1202’s posts really gives you some insight into the complete lack of understanding of basic microeconomics that allowed people to justify current home prices in their minds. Really makes me feel sad about the state of education in this country.

[bigmoneysalsa]

Two more things should be in there. The first is maintainence. No longer get to call the landlord when something breaks; you have to go to Home Depot and whip out the credit card. The second is the lost opportunity cost of your equity. Historically homes return almost nothing above the rate of inflation in the long run.

[bigmoneysalsa]

PerryChase, please carefully read through “A Bubble Primer” on the home page of this site. It would be a very bad idea for your Aunt to by a condo in San Diego right now as prices are poised to fall significantly in the next couple years. I currently live in a UTC condo conversion; I picked it out of the zillons listed on San Diego craigslist every day. She should have no trouble finding something there for a reasonable price and willing to give her a long-term lease.

[bigmoneysalsa]

Steve thanks for posting. We don’t get a lot of thoughtful contrarian opinions here so it’s good of you to keep us on our toes. Regarding your thoughts:

– Median prices are a lagging indicator, and as powayseller mentioned above there are other indices that are probably better. Also, is 2200 “a lot?” You didn’t provide any historical context for those numbers. Even if so, don’t you think that a 24% drop in sales says something about where prices might be going?

– Check out http://bubbletracking.blogspot.com/2006/07/tracking-san-diego-county.html inventory seems to be going up at about 1000 – 1500 per month and has been since the start of the year. So far in July we are up about 450. A little slower but not much.

– Of course not all condo prices have fallen. I don’t think anyone has been foolish enough to claim that, or to claim that there are none that have gone up. Even in a down market surely there are many properties that go up due to other factors (gentrification of a particular neighboorhood as an example). What we are interested in is where the market as a whole is going.

– You’re right that until recently foreclosure rates were abnormally low and the current rates are not so bad historically speaking. The question is why were they so low before? The simplest answer is that rising prices allowed people to avoid foreclosure by selling at a good profit. So while the end to these abnormally low rates isn’t direct evidence that prices will fall, it is direct evidence that prices aren’t rising much anymore.

[bigmoneysalsa]

My condo conversion (rented) went down $3026 last week and 2.1% last 30 days. That’s about $8671 according to the Zestimate.

[bigmoneysalsa]

I rent in Verano. Just this week they lowered the starting price for a 2 bedroom to $360K from a previous $380K on their glossy billboards that are plastered everywhere. Best part is, someone a few doors down from me is trying to flip their 1 bedroom for $350K. Just another example of how the developers get it, and the individual sellers don’t.

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