San Diego County leads the way in home price declines
Los Angeles Times bubble watcher Annette Haddad has this to report in a July 13 story. The San Diego real estate market is now the first major California real estate market to lead the way in price declines, after leading the way up six years ago. Median prices are falling when measured as year over year. In June the median was 1% lower than a year ago. It was the first county YOY decline since July 1996. Many people who bought homes in June 2005 have no equity increases to speak of. This is in contrast to the 20% YOY gains the market was enjoying just a few years ago.
Los Angeles County median home prices rose in June at their slowest pace since 2001. Other hot markets, such as Miami, New York, and Las Vegas have seen the signs of a slowdown, such as significantly rising inventories, slower turnover, and sharp price decelerations, but have yet to see price declines.
Incredibly, the talking head economists and forecasters still dismiss as impossible "massive declines" and "loss of values". talking instead about how the "strong economy" is "insulating the market from a collapse".
Some investors figure if they just "have staying power", they "won't get hurt". Doesn't this sound like stock investors convinced by their brokers to "invest for the long term"?
posted by bearmaster at 9:12 AM
1 Comments:
"Incredibly, the talking head economists and forecasters still dismiss as impossible "massive declines" and "loss of values". talking instead about how the "strong economy" is "insulating the market from a collapse"."
What they fail to point out is that housing has been driving the economy for the past 5 years. Now that it's slowing dramatically (San Diego is just the start) the economy will pull back and could fall into recession. BTW, some of these same economists were predicting 10% price gains in SD County in 2006.
Look at the data and try to find something that will hold up prices long-term as the economy slows, credit tightens, rates rise and ARMs reset. IMO, 30-40% declines will be the norm in bubble areas over the next 3-5 years.
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