Diego Housing Market – Oh, It’s Just Back to
‘Normal’ …Yea, Right!
By Bob Schwartz, CRS,
www.brokerforyou.com All rights reserved.
“It’s just back to normal’, “Just a seasonal slow-down’,
“A normal minor adjustment’, “A great time to buy, with
a much wider selection’, “A cooling market’”, “A soft
landing”, “A slight
etc. Yes, these P.C. phrases are now replacing the “We
should have a strong market for the foreseeable future”
industry line prevalent just a few short months ago.
The sad fact is people are still in self-denial here.
We're "special" because of our weather. We are known as
America’s Finest City after all. It’s still common to
hear someone say, "If you don’t buy now, you're going to
get priced out of the market!"
Talk about your irrational exuberance in the
Southern California real estate market.
In a 2004 summer poll in the LA area, residents believed
prices would continue to go up by more than 20% a year
for another decade!
What will be the industry P.C. phrases we’ll be hearing
in about six to nine months? “It
may well go as: “This home is a great buy, why just nine
months ago you would have paid $25,000+ more…what a
great savings.” Naturally, you would be talking to a
buyer. For a seller (who has owned for some years) you
might say: “Well, you are still making a profit. Who
could have even known that the market would have turned
down so fast?” For the downtown high-rise buyer who
though they got a real deal on the final phase of their
Gas Lamp digs, a
real estate agent may be saying: “Well,
because the resale value is actually below your 100%
interest only trust deed, you really should consult a
real estate attorney and/or meet with your lender to
propose they accept your deed in lieu of foreclosure”.
Are you reading this and thinking I’m way off base?
Here are a few recent headlines:
National Association of Realtors reports, in part:
existing-home sales – including single-family, town
homes, condominiums and co-ops – were down 5.7 percent
in December from November.
Time Magazine reports that 'Vegas
Condos Go Cold.”
reports "Real estate groups in the Washington area have
also reported declines to varying degrees.”
bloom is definitely off the housing rose. Housing peaked
last summer and has been weakening ever since,"
said Mark Zandi, chief economist at Moody's Economy.com.
New York City Mayor Michael Bloomberg recently said the
real estate market was slowing "dramatically" and only a
"miracle" could stop soaring mortgage rates from eating
into housing prices. "The real estate market is slowing
down dramatically and we‘re going to have a problem down
the road," Bloomberg said.
"If people who want to sell their houses have to wait a
longer time before someone comes along and buys it, it
would be a miracle if prices didn‘t start to go down,"
"'The market has
peaked,' said Jack Kyser, chief economist with the L.A.
County Economic Development Corp. 'The fever has broken
and now the question people are asking themselves is if
there is a crash ahead.'"
This is my own opinion on a realistic view of what lies
ahead as far as the
San Diego real estate market: A multi-year
depreciation that could easily take 30% off the highs
which reached this market’s peak during the summer of
2005! Plus, I foresee headlines, maybe even national,
announcing how the
San Diego high-rise downtown boom has turned
into a foreclosure city!
San Diego Realtor, I provide these facts to
my sellers. If their property is not generating
meaningful activity within the first month of being
listed, it would be prudent to consider a revised
marketing plan similar to what many
San Diego real estate developers are
doing. This would be a combination of value-range
reduction as well as agent and buyer incentives to
position the property as the best total value for the
think as Realtors we must adapt and not deny. To
otherwise will have a dramatic impact on your financial
health and community reputation
ABOUT THE AUTHOR Bob Schwartz, is a Certified Residential
Specialist, CA licensed real estate broker with
Diego real estate. Bob has over 27 years of
residential real estate experience, authored a number of
published articles and served as an expert witness for
San Diego legal firms.
Other sites of interest are:
San Diego real estate,
Los Angeles lawyers,
San Jose lawyers,
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California gold nuggets
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