It’s always interesting to go through the articles and stories on Inman news or RealtyTimes to get an industry perspective on the bubble. I’d usually browse through the Inman topics once or twice a week looking for a juicy story, but most everything was the typical anti-bubble propoganda. Boy how things have changed! Most every article is about covering your backside.
Let’s take a look at one very recent piece on RealtyTimes
San Diego Real Estate — A Trend to Go National?
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The grand opening long buyer lines, multiple offers, offers above the asking price and homes selling within days of being listed are just fond memories now. However, due to the huge home appreciation all San Diego real estate has seen, with the average home up 100 percent in the past 5 years, combined with the boom in 100 percent adjustable/interest only loans, the stage is set for what is sure to be mind-numbing depreciation.
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So, sure it’s great to be optimistic about your real estate market place, but ignoring the obvious trends will cost you in both money and reputation. It was about five years ago that the mantra was that this was a new paradigm and the stock market no longer followed the old rules of valuation. We were soon to reach Dow 20,000! Hopefully, you missed that costly over-enthusiasm. The result was such a drop that five years later we finally may be building a base.
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Yes, we have started on the down leg of the typical ‘Bell Curve’ and the probability of surpassing our approximate 20 percent drop in San Diego home values experienced from 1990 through 1996, seems assured. Plus, as real estate trends seem to start in the West and then move east, any U.S. real estate market that experienced huge price appreciation the past five years, will experience the same depreciation in real estate residential values.
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Most certainly very surprising words considering these were published on a real estate news website. And yes, you read those words right, “the probability of surpassing our approximate 20 percent drop in San Diego home values experienced from 1990 through 1996, seems assured…any U.S. real estate market that experienced huge price appreciation the past five years, will experience the same depreciation in real estate residential values.”
Batten down the hatches folks, there is one heck of a storm brewing.
Caveat Emptor!
Grim
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