Soft in San Diego

Posted by: Peter Coy on June 14, 2006

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.

Reader Comments

Anonymous

June 15, 2006 8:18 AM

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...

Bryant Keefe

June 15, 2006 10:34 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

Dweezil Zappa

June 15, 2006 8:59 PM

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?

bryan cacacho

June 16, 2006 12:56 AM

i wish they did, id buy 50 homes in sd

bryan c

June 16, 2006 12:57 AM

i wish they did, id buy 50 homes in sd

JL

June 16, 2006 10:27 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!

sdreb

June 17, 2006 6:50 PM

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

Svender

June 19, 2006 8:44 AM


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

Homes for Sale in

June 19, 2006 9:49 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

Ben

August 9, 2006 3:05 PM

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

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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