[sdrealtor]

Thanx JG,
Weak sales also result in a smaller sample subject to outlier effects. The 850K peak point corresponds with what looks like a 50% decline in teh number of sales. I’m ready to throw that data point out of the mix as an outlier.

I think plenty of time at or near the bottom is a good thing as your timing has been less than perfect this time around. Badabadum! (rimshot)

[sdrealtor]

a reasonable price alone isnt getting it done these days. crappy houses just arent selling well in this kind of market. W/O the prospect of appreciation people want something turnkey.

[sdrealtor]

JG,
Glad to hear you are recovering well. I guess you got the flowers.

When I look at the graph I see exactly 2 data points above 700K at the peak time period. In a thinly traded market like LJ at a time when volume fell through the floor, I have a hard time calling a meaningful peak at 750K. If so there was a major recovery in Spring of 1992 that we werent aware of previously. Similarly, I see very little under $450K in the trough. It looks alot more like statistical noise to me as a result of the a possible change in the ditrbution of homes sold rather than a change in pricing. Does the data you purchased have sales volumes? Not that you dont have plenty to do but I’d be interested to see what that looked graphically.

The good news is that I see a 4 year trough between mid 92 and mid 96 where prices were at a pretty consistent level. Assuming, as you expect, that we see the samething happen again, that would give you plenty of time to find the “right house” rather than “any house” when things are at or near the bottom.

[sdrealtor]

Rustico,
We all have our biases. Its the baggage we carry as a result of life experiences. I try to make mine as apparent as possible so people understand where my seat is positioned. Its always vital top consider the source of any thing you read or hear. I apologize if you feel I’m evasive or lazy. I’m just so busy these days tending to RE matters, 2 other businesses, kids, pets, extended family, the house, landscaping, several large circles of friends etc. The reason my posts are always full of typos is that I never proofread things….just dont have the time. I try to get out what is in my head at a given moment because if I dont I’ll be around the corner picking up my kids from school.

Yikes..gotta run. School lets out in 15 minutes

[sdrealtor]

waiting hawk
thanks for all the great links. they are now added to my IE faves.

[sdrealtor]

nice job NSR,
I think you pulled a gem out of this. The lenders spent alot of money and probably arent pleased with the bottom line after all is said and done. This test could encourage then to cut bait and run earlier.

sdr

[sdrealtor]

jg,
Somehow I believe your feelings are intact at the moment;). Thanks for posting the graph and it pretty much confirms what I thought. The 800K+ median data point was a major league outlier. Heck, it was a HOF outlier. The peak looks like it really was around 650,000 and the trough looks like it was around 450,000 which translates to a nominal loss around 30%. I’d agree that passes the sniff test. A 30% decline in nominal prices would be a very significant fall in prices this time around and coupled with 5+ years of stagnancy like last time would represent real declines around 50%. I’ll buy that.

sdr

[sdrealtor]

sddreaming,
They were from 1995. Could you imagine being able to buy homes in LJ at anything close to those prices? Wow, that would really be something I’d be excited about.

Have it w/ the inflation adjustemnts and please post the results.

sdr

[sdrealtor]

Rustico,
Sorry you feel that way but I am neither dishonest nor a salesman around here. I tend to be bearish but I constantly challenge my beliefs. I provoke people to question their assumptions and look for answers. The beauty of the web is that we can challenge each others viewpoints without ending up in each others face. I never take anything personally around here and hope no one does either though i suspect some do. To me it is a wonderful outlet for learning and a virtual version of Trump’s Boardroom entertainmentwise.

SD Realtor has never stated his reasons for being here and I suspect they are different than mine. At first it annoyed me that he was prospecting but it doesnt bother me anymore. The truth is he is a far more agressive prospector than myself and I think thats great. He’s trying to support his family and get somewhere in life. I hope he succeeds because he seem’s to be a real good guy.

[sdrealtor]

jg,
I hope you got the gist of my post last nite and suspect you are sharp enough to get it. The thought of being able to buy an 8000 sq ft ocean view home on an acre in LJ Farms for less than $2M sends goose bumps down my spine as I’m sure it does for you.

I see all the negative signs you do and am constantly amazed how we got here and how we have been able to stay here. It really defies any logic. On the otherhand, I am also amazed by the number of ordinary people I run into everyday who have accumulated significant wealth and liquid assets. For every wingnut living the high life with an Option ARM I see a high earning professional or business owner living well within their means. I look at Del Mar, where there are about 15 to 20 decent properties available under $2M each year and know that there are alot more people than that looking for one.

Comparing to life in the 20’s, I have nothing to support this but suspect that wealth is far more spread out than at that time when the only wealthy people were the industrialists. I dont know how this will play out and my crystal ball only extends out 6 months to 1 year at a time but whichever way it goes I hope you reach all your goals.

[sdrealtor]

There is defintely a difference between us. I am not here to make friends or gain clients. I am here to learn, to share with others who want a taste of the cold reality (good or bad) that is happening on the streets and to have a little fun. SD R, who I have never met but like and respect, is here for different reasons.

[sdrealtor]

Rustico,
Sorry but you are completely off base. I am a bear not a bull and believe prices will fall. I wouldnt be here if I didn’t. My question for JG re: La Jolla was whether the low median price he quoted of 395K was representative or just yet another problem with using median price data. Those of us who have been around here for a long time fully understand the weakness of the using a median price yet occassionally one of us will pull it out to justify what we believe. If you read my message you will see I said ther was no individual tx data prior to 1995 but wished that there was so we could examine what really happened.

I wasnt taunting JG at all, at least that wasnt my intention. I posted a hypothesis and then went back to test it providing some examples of pricing as far back as I could get. Frankly, I dont think there is person on this board that wouldnt love to see those prices in LJ again, present company included.

RE: CV for inventory of SFR’s to drop 10% through the 1st 2 weeks of May is not insignificant. It is a sign that supply and demand are far more in balance than many of us, myself included, hoped for. I report on what I see not what I hope for. What I hope for is extraordinarily strong affordability so all the great folks out here with solid careers can afford to live in the type of neighborhoods they really deserve and provide their families the type of environment I’ve been fortunate enough to land in. Believe me, i’m no genius and I truly feel blessed to have what I do.

Lastly, you are completely off base with the outing of Powayseller. I NEVER did that….NEVER. She stepped forward and made herself public out of choice.

[sdrealtor]

Rustico,
That was just an exercise in fun for me. Really could you imagine prices like that in La Jolla. I think we’d all buy 1 or 2 at those prices even if we didnt want to live there.

Regarding CV, keep your broom out. I didnt ignore your critique on CV. I expounded on it exponentially. Read the Short Sale Monitor. I addressed the state of the market in CV several hours ago. Sorry you missed it but it adds further evidence that CV is cooking right now and has been all spring.

Here’s a little more:

1st two weeks in May for 92130 SFR

New Listings = 22
Fell out of escrow = 4

Total added to Inventory = 26

Went into escrow = 23
expired = 8
withdrawn = 5
cancelled = 7

Total taken off Inventory = 43

Thats a net decrease of 17 homes

1st two weeks in May for 92130 Attached

New Listings = 23
Fell out of escrow = 2

Total added to Inventory = 25

Went into escrow = 22
expired = 5
withdrawn = 8
cancelled = 0

Total taken off Inventory = 35

Thats a net decrease of 10 homes

[sdrealtor]

Just for kicks, I went back as far as the mls data goes for La Jolla. Here’s some hope for JG:

8,000 sq ft LJ Farms home with ocean views on 1 acre for $1.875M

3700 sq ft 4Br/3Ba single level Muirlands home on 1/3rd acre (15,000 sq ft) with panoramic ocean/bay views for $1.03M

3000 sq ft 5/4.5 Upper Hermosa home with ocean views for $798k

The median for the year out of 270 sales was $480K.

Here’s what you got for $480K, 6BR/4ba, 3500 sq ft on mt Soledad above Kate Sessions with noview. 8 months escrow.

395K got you a 3/2 1300 sq ft Birdrock cottage 6 blocks from the beach.

Could you imagine those prices coming back?

Do you think there would be a few buyers around at those prices?

You never know……….

[sdrealtor]

jg,
Just a thought but could you be mining out of the data what you want to happen? I beleive that there was a big decline in the early 90’s but I think your greater than 50% decline is a data blip and hoping for another may leave you a bit wistful.

I have nothing whatsoever to substantiate this but I suspect what you are looking at is a flaw in the median. I’d love to see the data sets and sample sizes capable of substaianting a drop of 50% in the last cycle. I suspect the owners of higher priced homes in La Jolla were more likely in better financial shape than the owners of lower end homes and just didnt sell. I suspect an owner of an oceanfront house or one of many other trophy locations would be far more likely to have creative options as well as huge personal reasons/family history to hang on. I also suspect that volume was miniscule at the trough. I have a hard time believeing you could get a nice place in LJ for under $400k in 1994.

That would be an interesting analytical exercise.

[Author]

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