Bloggers on the Housing-Bubble
Article in today’s SDUT about bloggers and housing bubble punditry.
The Housing Bubble 2
The UCLA Anderson School has a report out on Californias economy. “Scratch the surface of California’s seemingly healthy economy and you’ll see an economy buoyed by a real estate bubble that could deflate at any time. ‘Right now the market appears to be at a tipping point,’ said senior economist Christopher Thornberg, who considers property in California overvalued by up to 45 percent. ‘There are signs that the housing party is ending.’”
Econo-Almanac
A good litmus test for any home price rationalization is to ask, “was this factor in existence 5 years ago?” If it was, then the rationalization is bogus, because it does nothing to explain why San Diego home prices have doubled over the past five years. The idea that much-higher-than-historical-average home prices are justified by a mild historical upward price trend, in addition to being circular and nonsensical, fails the “5-Year Test” miserably.
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MAS said on Friday, September 30, 2005, 7:52
The San Diego market does not move up and down evenly across all housing products. Some areas will retain their values better than others. I talked to a top realtor recently who stated the 3 areas that are the most overvalued are (in order):
1 - Age 50+ Retirement Communities
2 - The far outlying areas (Fallbrook and Ramona were mentioned)
3 - Condos (especially those with a low owner occupancy rate)
He also stated single family homes in good school districts and coastal properties will hold their value the best.
Dawn Lewis said on Monday, July 3, 2006, 15:06
I think that San Diego Real Estate being 45% overvalued is not very accurate. Maybe some areas of California might be but San Diego is mostly flat with some prices dropping here and there. The new home communities in San Diego aren’t helping the resale market in fact they are part of the problem of a “bubbleâ€. Most people who have to sell will sell and the might have to take less than they want in price. Many people will just wait it out and stay in the home they’re in and wait for the market to start climbing again. Hard to say when that will be. Many people who purchased a home 4-7 years ago are sitting on a ton of equity unless of course they pulled out too many equity lines and seconds on their homes. Areas like EastLake should hold its value very well; there might be a dip in price but not much. San Diego real estate is still one of the best investments in all of the United States.