Monday, May 14, 2007

Foreclosures in San Diego
This article in today's WSJ sounds scary and gives the impression that a 30% to 50% decline in San Diego home values is a possibility. I am skeptical of these bank auctions and would hesitate to draw definitive conclusions from them. The quote towards the end of the article that San Diego home "prices generally have been drifting lower over the past year" is closer, in my opinion, to reality. In my neighborhood homes are moving and some sales have been surprising, to me at least, for their high prices (thanks Zillow for recent sales information). Several homes sat for extended periods and sold for 20% or more less than their original list prices. Other listings have sold in a matter of days, not months, when priced near recent, comparable sale prices rather than at inflated list prices. It is hard to predict the future, but I am guessing a floor for prices has been reached.

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