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July 22, 2006 at 12:10 AM in reply to: Why I predict a 55% nominal price drop in North County #29254
sdrealtor
Participantsdduuude
Its hard to call anything the peak. I saw people sell homes in Feb/Mar/Apr that were never topped in a neighborhood and even had a few myself like that. There were some higher sales later but that could easily have been due to there not being a sale in that neighborhood for a few months. Remember that was the record low inventory time so there were alot of areas that had no sales. It was a time when if your realtor had enough b*l@s you could ask and get just about anything. To me that was the peak! Peaks that occurred later were mostly due to a lack of sales or not pushing the prices as much as they could have.July 22, 2006 at 12:01 AM in reply to: Why I predict a 55% nominal price drop in North County #29253sdrealtor
ParticipantRankandfile,
I think you’ve realized what I have after taking all the analytical skills in the world and realizing that it is a much more complex matter than people understand. Throw in poorly compiled, self reported data and you end up with one fine mess. The truth is, it doesnt matter much what the numbers are as it’s more important which way the numbers are going and at what velocity.Right now they are going down and the pace picked up the last 4 weeks. This appears to be due to falling demand at the end of the Summer and seller’s concessions that’s its over. Something to watch closely is inventory as we will find out who needs to sell in the next couple months. Those testing the waters should be on the sidelines by October with the real sellers left.
As for how to measure the decline? If you ask me, I’d say it’s going to be pretty easy to say how much we are down after all is said and done. I believe everything will be down fairly uniformly once we hit bottom and settle there for a year or so. Everything moves in relation to each other. As one area gets less expensive, the neighborhood below it must react and the prices fall there. The neighborhood above it needs to react also so it makes sense as a move up or doesnt appear to be enough for the money to the relo client.
I loved the whole price band months of inventory stuff by the other realtor. While I’m sure it provides value if you follow it over time, I chuckled wondering if it tells the sponsor that his home is in the best slot. Funny how bias can be introduced into any analysis without realizing or intending to do so.
July 21, 2006 at 11:08 PM in reply to: Why I predict a 55% nominal price drop in North County #29243sdrealtor
ParticipantGreat example of what Jim was referrring to! Seller thinks house is worth 975K. House sold for 850K 1.5 years ago and may at one time have been worth close to 900 but it will sell for 800 now. A 5 to 10% drop from the peak but 20% below sellers unrealistic expectation.
July 21, 2006 at 10:30 PM in reply to: Why I predict a 55% nominal price drop in North County #29231sdrealtor
Participant2003 prices would be very rare. There was an absolutely HUGE INSANE bump between Dec 2003 and Feb 2004 which is going to take some time to get over. For example, in those 2 months homes in North County Coastal SD increased between $50K and $150K with most getting a $100K bump or better!
July 21, 2006 at 10:26 PM in reply to: Why I predict a 55% nominal price drop in North County #29229sdrealtor
ParticipantTime to step in….
Homes in North County are now selling about 5 to 10% below the absolute peak numbers. I know that because I see it everyday. When those peak numbers occured differs from neighborhood to neighborhood but most peaked before or by the end of 2004. As for homes selling at 2004 prices, it really depends. Some are a bit higher and some are a bit lower but it general prices are where they were in Spring 2004.
As for the comment that Jim the realtor said prices are down 20%, that is a complete misinterpretation of what he said. He said homes will sell about 20% below sellers unrealistic expectations. By this he meant that sellers over estimate the value of their home and think it should sell for more than their neighbors (thus 5 to 10% above previous peak numbers generally occuring in late 2004/early 2005) when in fact they are now selling for less than last year (5 to 10% drop since Fall). Thus sellers false belief that prices went up + sellers not knowing prices fell=unrealistic sellers overpricing homes as much as 20% out of the gate!
sdrealtor
ParticipantRelax sdduuuuude
I knew exactly what I was doing the whole time and wont get drawn into this nonense anymore nor have I for about 1 month. A few months ago when I arrived this site lacked balance and an audience. About a month or so ago I noticed a real change and commented on it. From there it blossomed. It now has balance as well as a much larger audience including some great contributors from diverse backgrounds. My overiding mission in life is to help people. This site now does that and I hope it grows from here. My experience and viewpoints are now well represented on this board by others so I dont visit or comment as much. This board is rockin and has attained a critical mass, I look forward to watching it grow and hope it has staying power.
Cheers!
SDR
sdrealtor
ParticipantI love what this board has become! 3 months ago it was one-sided the sky is falling commentary with no balance. Now some of the biggest bears are able to tell a newbie that they need to do lots of research and assess their individual situations before deciding whether to sell now or hang on. People with important questions can come here and get great advice and multiple viewpoints. The diversity of opinions and expertise of all of you amazes me. It makes me proud to have helped keep enough of you around long enough for this board to really evolve into something great.
I’ll be on the beach with the kiddies but sincerely hope you all have a great time on Saturday!
CHEERS!
SDR
sdrealtor
ParticipantI’m still here just really enjoying my Summer with the family. There is lots of good advice going around this board from conflicting viewpoints and I think it is a much better place than it was a few months ago when I arrived. Lots of well educated new posters around bringing great insights. I also bel”i”eve (thats for you Kitty!) that we are all being a little nicer to each other and taking the time to open our minds to other competing perspectives which is what I felt was really lacking. We all learn so much more when we open ourselves up to understanding that which we dont agree with. I’d like to think I had a role in that. Now onto World Peace!
sdrealtor
ParticipantCarlsbadliving,
You are a definite asset to this board, please stick around. Its reat to have someone knowledgable about land use on board.People drive down the freeways and look at that beautiful undisturbed ridges/canyons and dream about the views from the home they would love to build there without understanding that city/county government rules make that impossible.
sdrealtor
ParticipantI dont believe the land shortage was a major factor in the price run up either. I just wanted to point out that the land shortage is real and will impact us in the near future. In valuing a stock you look at future earnings. Similarly, looking at real estate values you have to look to the future when analyzing values. Looking at homes in an area where future buildable land is in short supply might not explain the current run up but it could certainly act as a buffer in the next several years to falling prices preventing the 50% drop some believe in and limiting it to 20% or so.
sdrealtor
Participantand that is his role as an appraiser, to comment on what is and what has been not what will be!
sdrealtor
Participantagreed 😉
sdrealtor
ParticipantI have a friend that owns one of the most respected engineering firms that does land planning/subdivisions for the major developers. I asked him whether the shortage of land was real or not. He said that with all the unusable land due to habitat, zoning regulations, dedicated open space and topography that there is very little land left for large subdivisions. Most of what will and can be built is already entitled and within a decade or so we will be left with nothing more than small to medium sized infill neighborhoods.
I respect him and no reason to doubt his comments. Based upon them, I believe there is a real shortage of buildable land.
sdrealtor
ParticipantThe fact that you can do something doesnt mean its justified.
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