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June 14, 2006

Soft in San Diego

Peter Coy

Check out this story from the San Diego Union-Tribune saying that the median price of new homes in the area dropped from $495,500 in April to $424,000 in May. Mathematically speaking, if prices kept falling at that monthly percentage rate (which they won't) they would be down to $12,000 in two years.

04:56 PM

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Why won't they keep falling at that rate? Is there a reasoning? How can you know for sure? People said they wouldn't fall at all, after all...

Posted by: Anonymous at June 15, 2006 08:18 AM

The prices could in fact keep falling at this rate however at some price point buyers will return and start buying thus causing prices to stabilize and rise with demand. This is proven with all commodities. I, for one, would love a weekend home in San Diego and will buy if the price was to good to pass up. There are no guarantees in any of this, like returning home everyday, one day you will not. In Tucson the seasoned investors are buying and the novices have retreated home because the media told them too and they did not know what they were doing to begin with.

I look forward to several robust years of investing in our Southern Arizona market. We are in a regionally strong market. Low unemployment, strong jobs growth projected, and great migration.

It sure is interesting in the housing market that we can be sure of.

Cheers,

Bryant Keefe

Posted by: Bryant Keefe at June 15, 2006 10:34 AM

Humpty Dumpty sat on a wall

Humpty Dumpty had a great fall

All the kings horses and all the kings men couldn't put humpty dumpty back together again.

See the parallel?

Posted by: Dweezil Zappa at June 15, 2006 08:59 PM

i wish they did, id buy 50 homes in sd

Posted by: bryan cacacho at June 16, 2006 12:56 AM

i wish they did, id buy 50 homes in sd

Posted by: bryan c at June 16, 2006 12:57 AM

In response to "Anonymous" I think its a pretty safe bet to say that house prices in San Diego will not wind up at $12,000...so I would say his reasoning is pretty sound there! If not you can bet I'll be the first to go snap up a nice piece of beachfront property for less than I paid for my car!

Posted by: JL at June 16, 2006 10:27 AM

I agree. They'll never drop beliw $13,000.

Posted by: sdreb at June 17, 2006 06:50 PM

Returns on real estate funds in Canada have gone negative:

"For the one-year period ended May 31, the 32 funds in the real estate category averaged returns of 13.61%, while the three-year average annual compound yield through May was 15.62%, and the five-year annualized figure was 10.63%. Some funds posted yearly returns approaching 20%.

More recently, though, the figures haven't looked nearly as rosy. The average return for real estate funds during May was negative 1.63%, and the average three-month figure through May was a mere 0.01%."

WARNING: lots of positive spin in this article by the fund managers:

http://www.canada.com/nationalpost/financialpost/story.html?id=0032ce2d-84e6-4fd8-91d5-72de1b082579&k=27144

Posted by: Svender at June 19, 2006 08:44 AM

Things are falling so much because people are spoilt for choice as there is so much property on the market at the moment; things will start to level of as property will start to be in short demand for local real estate agents

Posted by: Homes for Sale in at June 19, 2006 09:49 AM

I think that drop was accidential and prices will only rise in the future according to market law.

Posted by: Ben at August 9, 2006 03:05 PM


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