San Diego Neighborhoods Head For The Exits
The Voice of San Diego reports on a new trend in the housing bubble. “For the last few years, there were maybe a couple of homes for sale at any one time in the Morningside development in Sabre Springs, a local realtor said. Right now, there are 10. The huddle of houses for sale in the San Diego neighborhood is part of a growing phenomenon in San Diego County real estate. ‘Cluster selling,’ which Realtors said they haven’t seen since the mid-1990s, is now becoming evident in several San Diego neighborhoods.”
“‘People are getting nervous. They’re seeing their neighbors selling their home and they’re thinking maybe now I should go ahead and put mine on the market before they take something really low and the prices go down,’ said Karen Whitfield, a realtor in Santee.”
“The prevalence of such cluster selling is undoubtedly adding to the high levels of real estate inventory in the San Diego County market. There were 16,464 homes on the market Wednesday. That’s up from March 2004’s all-time record low inventory of 2,301 homes.’
“Alan Gin, professor of economics at the University of San Diego said homes sales generally lead to more home sales, whether the sales prices are high or low. When a home sells for more than expected, Gin said, the neighbors may try to cash in their equity. When a home sells for a disappointing price, however, the neighbors may think it’s time to bail.’ Gin said it’s too early to tell whether the selling trends being seen in the county could lead to a larger ‘chain reaction’ in selling, as homeowners scramble to cash in on the equity gains they have seen in the past few years. ‘I’d like to see more data,’ he said.”
“Realtors said they are certainly starting to see homeowners who want to cash in on their homes in the face of an uncertain future for home values. Indeed, some Realtors said they are advising their clients that selling now, rather than in a few months, is a good idea, if only because it could take a few months to sell their home. ‘You might as well get into the market right now. I don’t care if you’ve got to move out and move into an apartment for a couple of months. You’d be a lot cheaper doing that now, and probably get a better price now,’ said Gordon Kane, a realtor in Poway.”
“Many investors and first time buyers have ridden the wave of price increases this far, realtors said, and are now ready to paddle to shore before they get wiped out. ‘We see a lot of move-out buyers,’ said Judy Kesselring in Escondido. ‘You have a young couple in a condo who decide to have a family and buy a home. They don’t want to pay $600,000 for a small home, so they say ‘I’m going to take my equity and go to Arizona or Nevada.’”
“Rich Toscano said he’s fascinated by the rise in cluster selling. ‘While the countywide median home price is up over last year, more than 20 percent of San Diego ZIP codes have seen year-over-year median price declines of 5 percent or more. ‘Cluster selling’ could potentially explain the regional disparity in home price performance,’ Toscano said.”
“With home prices so reliant on the optimistic or pessimistic sentiment flowing through the proverbial grapevine, Toscano said the latest trends could be indicative of a changing attitude about San Diego’s housing market. ‘It makes sense that the euphoria would start fading in a piecemeal manner, and through neighbors starting to discuss the idea that maybe home prices can go down.’”
OT:
Well, that was quick. The 30yr is now beneath the 90 day!!!
What, where? Beneath the 180, but not 90, at least according to PIMCO.
Bloomberg
30yr= 4.48
3 month= 4.51
Beautiful! Houston, we have a problem..
Cluster selling? I can think of another “cluster” phrase…
Are you suggesting that I change my site to “Another Cluster F–KD Borrower”?
SoCalMtgGuy
Another F@CKED Borrower
FB FORUMS
Ahhh the power of suggestion. No, I was thinking about “cancer clusters.” (Yeah right, and I’ve got a Miami Condo to sell you). Still you are correct. We need a glossary. FB, FL, and now CF’d. The old term was rush for the exits but CFSeller is so more descriptive.
In my neighborhood we’ve got this one early 90s tract that is known as “the cancer.” The rest of us are 1 acre plus minus 1961-1970s homes built to the natural contours but these beasts are 8,000 sf lots carved out of the land.
Great example of condo cluster selling here in Dana Point,CA (Orange County, 92629) where I live. I almost didn’t believe my eyes when I saw this listing. Reduced after 2 days on the market! And just check out the description. There have to be a good 10-15 condos for sale on the same street.
http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=S426537&page=1&property_type=CONDO&mls=mls_so_cal&cKey=h7nd0c1w&source=SOCALMLS
i remember another famous cluster that got wiped out.
general george cluster
I knew it’s a cluster something or another…………..
so this is cluster’s last stand?
(ouch….you knew that was coming!!!)
wow, wonder what inventory change will be from super sunday to presidents day= BIG !
barbara corcoran from corcoran group and Fox Cable news would say this is a perfect time to buy in San Diego!!
Yes, it’s the perfect time to get the last fools. Don’t tell them the market has already crashed.
San Diego Realtors must really hate Toscano by now.
>>>>San Diego Realtors must really hate Toscano by now.
Your comment reminds me of what they use to say about Howard Cossell: People have mixed feelings about Howard. Some people hate him like poison, and other people only hate him regualar.
Robert Campbell
I’m sure that applies to their feelings about him. I’m waiting for them to begin blaming him for the change in mindset that were seeing take place on almost a daily basis. Personally, I have to thank him if I get the chance to meet him ( I live in Mira Mesa..proudly renting). His statistics helped me to convince my wife that we shouldn’t buy right after having moved to SD from Chicago over a year ago. If it hadn’t been for his website, I would have thought that I was the only person in SD questioning what was happening with the price of housing here.
Rich is about to become the realtors best friend.
He’s done all the research and got all the numbers to convince anyone with an IQ higher than single figures to show the market is massively overvalued and heading for a substantial decline.
Realtors need sales to survive - if sellers won’t drop prices buyers won’t buy - Rich has the data to convince stubborn sellers that the market could be going down for a long way yet and it may be best to chop prices early and aggressively to shift the property.
Realtors are not the mindless cheerleaders some think they are - they are just sales guys - they really don’t care if the market is rising or falling as long as they can make a constant stream of sales - the one thing standing in the way of that right now is the sellers not dropping prices to a level where they can compete with builders chopping $150k off prices.
I agree. If you read the articles today, over and over, it’s the realtors saying sellers need to get realistic about prices, etc. The speculators will be mad, but who cares?
Realtors will soon replace their mantra of “buy NOW!, before it’s too late” with “sell NOW! before it’s too late.”
I suspect some unscrupulous realtors are already increasing their listings by actively panicking sellers.
Replace it? Are you kidding? They say both things at the same time. They’re like the Pushmepullyou from Doctor Doolittle.
The Laws of Thermodynamics don’t apply to real estate. Buy and make money! Sell and make money!
Is this the Robert Campbell? The one who writes and teaches about timing the real estate market? I bought and read your book in late 2002, I think it was. Great job calling the top in San Diego in August! Out of the pain you experienced during the 90’s slump you’ve come up with a good way of evaluating markets which will probably help a lot of people escape a nightmare. I just posted a bit about you on my own area housing bubble. I see you are offering a class at Learning Annex.
Yep, I’m the Robert Campbell that wrote the book Timing the Real Estate Market.
My timing system gave a “sell signal” for SoCal in August 2005, as you noted.
Thank you for acknowledging me on your website.
Truth hurts, and the messenger of the truth often times risks getting killed for revealing it.
Perhaps this “cluster” selling is the result of speculators who bought 4-5 homes in one developement putting them all on the market at once? Has anyone check to see if these clusters of homes for sale are owned by the same people?
I know this area, it is an older neighborhood, built in 80’s, so that would not be the case.
Doesn’t mean it’s not a speculator who bought several existing homes.
Very good question. It wouldn’t surprise me if that were true.
The music has stopped and I can see *clusters* of flippers fighting over one chair. Better drop those prices to get it!
Just saw the treasury yield curve and crapped my pants.
Going forward, we’ll have to start referring to it as the “yield ski slope.” http://tinyurl.com/2dw6x
Something perverse is up — Treasury reintroducing the thirty-year long bond shows new supply is on the way, which should result in lower, not higher bond prices. Does anyone have a cogent explanation for the dive at the long end of the curve?
Pensions, China, etc. Take your pick. Brad Setser’s blog is a good source.
Everyday I see more “For Sale” signs going up. There is a thirty-year
old house near me for sale and it is priced for $549,000. Who
in there right mind would pay that price? Everything is overpriced
here! Let the prices drop!!! Too many greedy people in SD. Heck, you have to be making at least $130,000 a year to afford a house here. Do they build affordable housing for those who actually work here? Heck no! The only affordable housing offered is apartments or converted condo’s selling for a low $259,000, etc…What a joke!
Burst this stupid housing bubble and let these greedy bastards burn.
Someone who only cares about their monthly payment and not their total debt load.
I read somewhere that investing in nice boring CD’s and savings accounts was dumb. I wonder how my 4.4% a year Orange CD compares to a 30 Year 4.64% ? Why would the premium be only a measly 0.24 for tying up my money 29 additional years? And BTW pardon my ignorance as far as bonds go….
Here’s why that 30 year only yielding a “measly” 0.24% premium could turn out to be the smart investment. Buyers of the 30 year are betting that we will be in a recession soon, which would mean the fed would cut rates. Your orange CD will drop accordingly. Fast forward two years - your orange CD is now only yielding 1-2%, while the bond holder is still getting a very nice 4.64% on his investment. Not only that, the bond prices will have risen accordingly, and the holder can sell for a nice profit if he thinks that rate will soon rise again.
The U.S. trade deficit for 2005 was $725.8 billion…an all time high.
Someone needs to get ahold of Gin and invite him over here–there’s plenty of data.
Let’s be real. When we sold our home in late 2004, we were the only ones selling in our whole subdivision of Oceanside (around 100 homes). And when we bought that home in 1995, we had 12 to choose from in our subdivision. Every house we looked at was almost begging us to buy, not just in that tract but all over Oceanside. Our friends have been trying to sell in the 92056 zip code since before Thanksgiving. They’ve had one offer–$100,000 under asking price. It’s a change of psychology and pure fear we’re seeing. I don’t have the insight into the housing market that many of you have. But I know what I saw and heard in the last downturn in California, and the script is identical. Throw in the crazy financing schemes and you have the perfect storm.
I think deep down what I want to see more than anything is this last wave of greedy speculators get burned.
I want to see Mr & Mrs. “we quit our jobs to become real estate investors and now no one wants to buy our property and we have to pay the mortgages and we are loosing these homes and oh woah is me” stories on 60 minutes, 20/20, dateline and all over the media.
Amen. I live in the heart of SD and often overhear these idiots at the local Starbucks while they’re meeting. Just yesterday there was a group of five of them talking about whether they should be “pulling equity” out their investment houses to improve the landscaping so they would sell faster. What a joke. These people are an insult to real business people and entrepenuers.
Yeah, I can see schadenfreude in my future.
Weird misfortune caused me to stretch my finances and by a house in ‘96. On paper, that investment has made me nearly $750,000. But I KNOW my gain is the result of pure dumb luck. On the other hand, there are a lot of people walking around mistaking their dumb luck for signs of genius; who smirk at parties with the false belief that they’re blessed with financial foresight.
A housing crash would hurt a lot of people. The VAST majority would be innocent victims. But a few…and I can think of some close to me…deserve exactly what’s coming to them.
If you bought in ‘96 and didn’t refi for another spec house, H2, Escalade, then you don’t really have anything to worry about. A decline won’t affect you the way it will those who have bought in the last 2-3 years.
I think it will help far more than it will hurt. Affordability is a problem for many good friends who easily pull six figures. RIDICULOUS!
The specu-vestors with four places on 0% financing will get slammed, as will the honest people in housing related jobs… but it will help a lot of people ultimately.
Likewise, I regret that it will bring me great pleasure to watch these overextended speculators writhing in financial agony. Ues, Schadenfreude. I’ve run into one too many of these smug real estate “experts” over the past few years, each of whom is willing to dispense their vast knowledge on the subject. Let them experience the downside of housing as a speculative investment vehicle. It is a natural part of the economic cycle for recessions to shake out unproductive elements in the economy, namely flippers. I feel a little (but very little) sympathy for uninformed home buyers who got themselves into toxic mortgages in overpriced markets. But really not much different than ppl who invested in a handful of dotcoms, bragged about it on the way up, and were shocked at the losses in their undiversified portfolios on the way down. The positive effect of the popping housing bubble will be a fresh outlook on housing as a potentially risky asset class, instead of a “sure thing”.
Dead on, Pam. This thing has turned so fast. Unbelieveable. I’ve followed and commented on this blog for a year now, and all the ‘worst-case’ scenerios that made people look like crazy-people were probably too tame. In the Central Valley, the builders are going flat out to finish thousands of homes started mid-2005, while the re-sale inventory is simply exploding. Up 3 to 5 times in places. and it’s very early in the year. Begin the Jaws theme here.
For anyone that follows Gin, his view of the SD housing market has generally been cautiously optimistic and mostly based on his support of the tight supply argument.
Will Carless of the Voice of San Diego reports on Feb 8th that the record-high inventory of homes in San Diego County was “19,000 homes in July 1995 and the record low inventory as 2,301 homes in March 2004. That means the county’s inventory of homes has increased by 713 percent since March 2004.”
Yet Gin needs more data…..
Also Gin asserts “homes sales generally lead to more home sales, whether the sales prices are high or low.” The implosion of inventory in SD is a recent phenomena and was NOT happening when there were double digit yoy gains…
Gin is quickly losing credibility and I believe there is some hidden agenda here somewhere as I consider Gin too bright to not notice what is clearly happening. Any guesses, informed opinions?
(sorry if double posting, need to get used to new format)
Elzocalo,
If you’re looking for a hidden agenda, I’ve got one.
Alan Gin owes his professional existence to the real estate industry. The department he works in has been endowed by developers.
I imagine he’ll be one of the last guys to throw in the towel. The Henry Blodget of the housing bubble.
Here in the OC, according to http://www.ocrealestatefinder.com, we’re now almost half way to 16,000.
We’re at 15,312.
Wow.
hey auction heaven, do have numbers for oc from 1/1/06?
I Wanted to reply to this, being from OC I been read this blog for months, first time writer.
If I remember it was around 8-9k on 1/1/06
On 1/20/06 9804
On 1/30/06 10244
Today 2/10/06 15312
With ocrealestatefinder you have to be really careful. They are really tricky. First off, they have commercial properties. Secondly, if you go to advanced search, you’ll find that actual OC properties are 11,676. The 3-4000 additional properties are from surrounding Riverside, LA regions.
I selected just commercials from OC and ended up with over 3,000 commercial properties.
anyhow, comparing to inventory number of 9,400 from ziprealty, 11,676 and 9,400 homes are not that far apart. I know ziprealty doesn’t capture ALL of the homes for sale in OC (saw a condo for sale the other day that I couldn’t find on ziprealty), but they do capture the great majority. The true inventory number should be around 10,000.
Spot on, near my office there was one sign a month ago. Now the street is lined with them. I’d like to see a big red and white map of the US in the style of the movie “Outbreak”.
speaking of inventories, they’re spiking in my little corner of the world, too. They’ve gone up every single day this week using my search parameters on Realtor.com. In fact, they’re up 11% in just the first 10 days of February. Can’t wait to see how this spring market plays out. I think a lot of folks looking to get bailed out are going to be sorely disappointed.
yesterday night nightline(ABC) had a segment housing boom. ANy one saw that?
Thanks, turnoutthelights. We had to bring $5,000 to the table to sell our first home in 1995, and sold at a total $20,000 loss, about 20%. The real estate agent at that time told us that the homeowners in that area should band together and go to the Tracy city council (NCal) and demand they stop building. I was too young to really get what was going on, and I was so happy to sell that house, I wasn’t going to stick around for a city council meeting.
Fast forward to today. Of the over 200 homes I follow in the 92057 zip code, several have reduced prices already, and yes a few are brand new homes leading the way. Admittedly some of the asking prices were way too high. Several homes, though, are 10% down from our selling price, and lots of them have views–ours didn’t. I am honestly shocked at how quickly it turned. I’m not that well versed in this to predict anything–but it is frighteningly similar to last time.
$130,000k annual income needed to buy your standard 1500 sq ft tract in san diego,that income puts you in the top 5% of income earners in the usa….now that the speculative fever has stopped,buyers are scared and realizing renting is the better alternative than being a mortgage slave,the inventory is going to go thru the roof…p.s. zillows zestimator is way off target,in cant possibly be able to measure todays market conditions,so i say chop 25% of its estimator and u have a good comp….
The only thing Zillow is going to bring to the market is more confusion to consumers. They’re going to consult a machine about the value of their home, then ask a bank for a refi or HELOC based on the number. When the licensed apprasier reports back to the bank the more accurate estimate, the home owner will be shocked. Zillow is going to make people believe their home is worth what a computation spits out instead of a real buyer with real money is willing to spend. Which will be about as big as the grand canyon.
SD still has somewhat of a small town network when it comes to doing business, etc. There’s a pretty well established group that is connected, does business together, etc. not unlike some other cities.
Gin either chooses to ignore the facts or is afraid to speak his mind for fear of retribution or being ostracized (sp?).
Good point and one which could explain Gin’s reading of the data or “lack thereof.”
Cereal…
I’m sorry, I don’t have numbers from 1/1/-6, but I can give you a pretty good guess.
I believe the OC was at 12,500 or so then.
Yeah. Big, big increase.
And it ain’t even spring yet.
Geesh, we’re seeing “clusters” already ? In Southern California?
Lomita, California. Late 1989 or early 1990. I was living in a 1 bedroom apt there. Jogging through the neighborhood one afternoon, it dawned on me that there were an awful lot of “For Sale” signs out on lawns. Forests of them - way beyond cluster. Dummy that I was, I didn’t know what that meant.
We’ve cited the aerospace downturn as a “reason” for that SoCal housing slump, but it looks like what is now developing could be far uglier, irrespective of employment conditions. (We know that real estate jobs, maybe financial/lending jobs are going to be the first employment sector hit by this thing. But then what?)
Some people say that the housing market can’t crash because it’s not like the stock market. That’s right. It’s not the stock market. When there are big gaps in market crashes, floor brokers step in and provide liquidity. The Federal Reserve lends money to brokerages on “easy terms” to make sure they stay liquid. And so on.
But what people are describing are some noticeable gaps (e.g., $100K in Oceanside) between “bid” and “ask” n housing prices. There are no floor brokers to step in and provide liquidity and buffer things. So what happens? If sellers won’t sell at reduced prices, we’ll see the housing market really freeze up. That’s like shutting down Wall Street for a while, only worse because the housing market is much bigger. Definitely bad for economic activity. If sellers do sell, we could see a price crash unprecedented in its speed. Refusing to sell could just delay the inevitable.
This is truly uncharted territory. And this is what bubbles do. Prices are so distorted, it’s not yet clear what the outcomes will be.
Right on
clusters sound more like the bubble in full reverse: Panic Selling.
Consider that in the past years the sellers all became buyers of one or more homes. These sellers have little intention of buying a replacement home.
They are in the hanging gallows and don’t know it yet.
Subtract from the pool of today’s buyers=
1)Would have been current buyers that accellerated their purchases, buying earlier (in last 2-3 years).
2)All the speculators that have left the building.
3)Those noted in this article that would have been move up buyers, but are trying to cash out.
4)Many potential buyers that have been priced out no matter what crazy loan you give them.
5)Those that will shortley be unable to obtain financing when risk aversion (of creditors) again becomes an issue.
The DaysOnMarket numbers will rise exponentially As:
Listigs (UP) / Buyers (DOWN) = DOM (WAY UP)
Come September many a “home owner” will get little in the way of sleep as they see their payments rising along with their debt, coupled with the newfound reality that their home is rapidly falling in value.
Would almost feel sorry for them if their loss was not my gain. They made grown up decisions while acting on childish motivations. “If it sounds to good to be true”. I will be a nice guy and ignore the fact that my future tenants have shitty credit due to a bankruptcy, they will just have to pay a little higher rent and get rid or their pets.
Man that was a bit bitter, sorry.
Thanks for this story - have seen the same clusters myself and was debating if it was just randomness.
Randomness will often produce things that look like patterns. However, this does seem like a bit more than random phenomenon, so this helps explain it.
ok auction, you guys are up 28% or so in 6 weeks. we’re up (LA) 31% since last august, per ben’s tracker. everything seems to be right on schedule.
San Diego, San Diego, San Diego…
everyday brings affirmation that moving over from OC to SD to take advantage of the impending bust is the right move.
Strangely enough in my local stomping grounds in North Park I have not seen many for sale signs AT ALL on recent walks. For a long time there were 10 on street behind me. Now there is one.
Could be temporary I guess. I do see a lot of fixing going on so maybe everyone is getting rid for the spring. Also many people have just purchased here and I think it is more to live in than flip since it is an older neighborhood.
NOT saying “it’s different here”… just saying it won’t be as immediately obvious.
Until the 500 new condos are finished this summer…
feepness,
Same thing in my area (La Costa). In summer of 2004, a lot of houses came on the market, and it didn’t really slow down…until January 2006. Although sales went up and down, there were always lots of houses for sale in my neighborhood. Right now, there is not even one that I am aware of. A few houses that were on the market since last fall suddenly sold in the past couple of weeks.
I really, really, wish this would get on already!
I don’t see how sellers will be able to freeze the market. There are just too many owners who will ‘have’ to sell due to the crazy financing they have on the books. Eventually the property’s holding cost is just way to high when their ARM’s convert. It’s not only investors, but also recent 100% buyers who just can’t grind it through the hard times.
I am a Broker and just attended one of the local San Diego County association of realtor caravans. Many of the agents were pleading for others in the group to find a buyer for their listings, one even got down on his knees and begged. Many commented on how their buyers were still being stubborn and weren’t willing to come down on price. On the other hand some people are adjusting, one realtor made an announcement that one of his listings was reduced by 1 million dollars. A home on Mt Helix that was originally listed around 3.7 million is now priced to sell for about 2.7 mil.
It is happening, and it’s happening fast!
Matt,
Are you concerned about your career choice considering what’s likely to unfold in the SD housing market soon? How do you plan to insulate yourself? Just curious.
I manage a lot of single family homes and commercial properties, and hope to pick up a lot more from stubborn owners who ‘don’t have to sell.’ When I list a home, I’m completely honest with owners about the current market conditions. It does me no good to spend money marketing a home that’s never going to sell. I only list for people who price right, otherwise it’s a complete waste of my time. I plan to see a lot of agents who ‘buy listings,’ you know the previous bar tenders, to soon be out of business. I also plan to buy, like everyone else on this blog, after prices fall 35-40 percent. That’s my buy target. Even if they fall even further, the deals will be amazing. The only way to make money in real estate is buy low and hold. The stuff I bought in the mid 90’s actually makes money, and even if they de-value 50%, I don’t care, cashflow is cashflow. If anything, I may be able to raise rents a bit as demand picks up. If you have enough cash, you can even buy properties from the current owner, then turn around and rent it right back to them. I figure after about a 40% drop, I’ll be able to break even on these deals, and in about 10-15 years, when the peak comes again, I’ll sell everything and finally retire.
I imagine everyone else here is planning on the same!
It’s nice to see a “broker in the trenches” telling us what exactly he is seeing.
Thanks for the nice comments, I’ve always found that being honest with people may not make you wealthy overnight but it does build a solid foundation to stand on. The slow and steady approach is always the best. Didn’t somebody once say “patience is a virtue?”
I used to be in the real trenches, combat. This real estate thing is so simple to figure out, just do what everyone else isn’t. Buy when the heard is panic selling, sell when the heard is panic buying, keep your best assets, and dump the rest at market price. It’s all rich dad, poor dad stuff.
My clients always come back to me, because however they may feel about their own situation, they always know I’m 100% honest. My position is that I don’t really care if they agree or not. 95% want to be told only what they want to hear, which isn’t the truth. The small 5% except reality and tell all their friends about how my advice helped them even if the outcome was somewhat painful.
No other type of business philosophy will ever outlast this one. It’s been proven over and over throughout the ages.
Sorry bad grammer, replace ‘except’ with ‘accept’
My comment on sellers freezing the market was hypothetical of course. Unless they were all of one and the exact same mindset and all agreed to refuse to sell. That will never happen.
“‘People are getting nervous. They’re seeing their neighbors selling their home and they’re thinking maybe now I should go ahead and put mine on the market before they take something really low and the prices go down,’ said Karen Whitfield, a realtor in Santee.”
So that is how San Diegans decide when to sell a home — when the neighbors are selling, I had better go ahead and sell my home as well. I always thought of the decision to sell a home as driven by one of life’s big events: Divorce, death of a spouse, retirement, job loss, etc. But I guess it is more of a herd thing for San Diegans?
Herding is instrumental to bubble psychology - stocks, housing,
remodeling, cars - most people are clones. When I put my house
on the market in Spring of 2004, my neighbors came over and
saw the changes I had made, and some of them fixed up their
houses as well. It precipitated a “keeping up with the joneses”
movement. You see it on this blog - in the early days there werent many saying the bubble had already peaked, and to buy
gold/commodities. Now a consensus has been reached (partly
because the bubble started and peaked at different times
around the country) on the peak and there are a lot more goldbugs around these parts. I think increased urbanization
contributes to this herding and is probably part of the explanation for the relatively low speculation in rural areas by the folks living in those rural areas.
“Alan Gin, professor of economics at the University of San Diego said homes sales generally lead to more home sales, whether the sales prices are high or low. When a home sells for more than expected, Gin said, the neighbors may try to cash in their equity. When a home sells for a disappointing price, however, the neighbors may think it’s time to bail.”
If the price of my home goes up or if it goes down, I become eager to sell. If the price doesn’t move, I prefer to stay put. Is this a new theory of how the housing market works?
So that is how San Diegans decide when to sell a home — when the neighbors are selling, I had better go ahead and sell my home as well. I always thought of the decision to sell a home as driven by one of life’s big events: Divorce, death of a spouse, retirement, job loss, etc. But I guess it is more of a herd thing for San Diegans?
… or the lemmings following each other over the cliff.