Since I started this blog, and actually far longer than that, I have believed that prices would probably fall back to 2001 level. The reasons for that are because that is where the charts all tell me prices should be. 2001 price levels would bring the price to income and price vs rent ratios back into line with the long term trends. Many other bloggers are now suggesting prices will fall back to 1997 levels. I suppose that's possible since when bubbles pop the prices tend to over-correct. Still 2001 prices are what I'm targeting as my "buy" sign.
Some areas of SoCal are getting close if not already there. Some of the outer areas of the IE are probably in the 2001 price range. The Bay area however has already passed that level and is now down to mid 2000 prices. Many parts of the Bay area started tanking well before us down here in SoCal. Inland areas like Sac and Modesto started in Late 2005/early 2006. Down here in Fantasyland we did not start seeing real price declines until 2007. So they are a little ahead of us on the downward slope.
Check it out
Bay Area home values plummeted to an eight-year low in November, as discounts on foreclosed properties continued to draw buyers and drive down prices.
The median for existing single-family homes in the nine-county region fell to $350,000, a 47.8 percent drop from a year ago and the lowest level since September 2000, according to MDA DataQuick. Nearly 50 percent of the houses that sold during the month had been repossessed in the last year.
"Bargains and foreclosures are still king," said Andrew LePage, analyst with the San Diego real estate research firm. "It's a little scary to think of what sales would be like without the deep discounts, since that seems to be what's driving the bulk of them."
Across the region, 3,217 resale homes traded hands in November, up 31.9 percent from a year ago. Transactions were down nearly 43 percent from October, in part because there were fewer than normal business days last month. Given the tone of financial news and tight lending environment, LePage said he was surprised the sales figures weren't worse.
Because foreclosures are swaying prices so much, values continue to hold up better on a relative basis in the coastal markets that have had fewer repossessions. San Francisco had the smallest year-over-year median decline, although it was still a significant drop: 18.5 percent to $697,500. The median means half of homes sold for more than that amount, half for less.
Sales continue to be concentrated in the low-cost areas that have been hit hardest by foreclosures. The most expensive markets - Marin, San Francisco, San Mateo and Santa Clara counties - usually account for 43 percent of regional sales but their share this month was 35 percent. Those four counties were the only ones where sales declined from a year ago.
The hardest hit county was Contra Costa, where prices sank 49 percent to $260,000. Spencer has seen homes in the area that nearly sold, only to come back on the market for $50,000 less two months later.