30% drop in San Diego condo prices
Good morning, again. The LATimes updates the slump story in San Diego and finds continued pessimism: "It's pretty bad, and I don't see a whole lot of improvement," says analyst Pete Dennehy. "Month after month, sales have just continued to go down. Foreclosure rates are through the roof. . . . We won't see improvement until 2009 and beyond."
How far have prices fallen? The Times quotes real estate agent Jose Saborio, who says condos in his building that orginally cost $500,000 have recently sold for about $350,000 -- a 30% drop.
Anybody going to the condo auction today in Mission Valley? We'd love to hear reports of what happens. Failing that, we're expecting the locals will cover it and we'll have a link for you tomorrow morning. Post your comments here, email your story tips to lalandblog@yahoo.com.
DR Horton issues press ban for auction:
http://www.signonsandiego.com/news/business/20070929-9999-1b29auction.html
Hope someone with some reporting skills gets in there as a bidder.
About that 30% drop reported.
How much did that $500K list condo originally sell for? My guess is that it was a lot lower than $500K. So the drop to $350K may have been more of a reality check for a deluded seller than an indication of the overall market.
With the speed of communication now available through the medium of the internet, I believe the price drops will be faster than anyone can believe. Therefore, I think the bottom will come much faster than anyone expects. Perhaps by summer 2008.
We'll see.
Posted by: sandiegan | September 29, 2007 at 09:07 AM
30% OFF! Now is a great time to buy!
Posted by: Pat | September 29, 2007 at 09:11 AM
Pat I am holding for the 50% discount!!! None of those condos are worth what they were asking for them anyway. Better yet, turn it into subsidized housing or to Section 8 since there is a shortage of affordable housing for all those hamburger flippers that day to day provide us with artery clogging food to our children and us.
Posted by: Willie | September 29, 2007 at 11:22 AM
I originally thought at least 50% drop in most LA residential real estate was inevitable. But upon further thought with consideration of employment options, south CA could very well see 60-70% drops from the peaks.
Those $500-750k starter shacks really have no value. They were dumps when built, now they're 30-50 year old dumps. Location important? Yeah right, location right between two other 1600 sq ft dumps.
Long, long way down to go.
Posted by: blah_to_you | September 29, 2007 at 12:30 PM
still 100k to go...
Posted by: jb | September 29, 2007 at 02:07 PM
500K down to 350K? If I'd bought one at 500K, I'd be manically depressed and dry heaving in abject misery now. I wonder how those people cope? Someone should go interview them.
Posted by: JerryL | September 29, 2007 at 02:35 PM
500K down to 350K? If I'd bought one at 500K, I'd be manically depressed and dry heaving in abject misery now.
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I'd be more than depressed. I'd be on the phone to my lender telling them to come on over and pick up the keys to their nearly-new condo.
Posted by: Charles Wilson | September 29, 2007 at 05:01 PM
Charles... the same thing happened in the early 90s and prices came back. My wife's Hollywood condo dropped 60% at one point -- two years later she sold it at a profit from the purchase price.
Posted by: investorguy | September 29, 2007 at 05:46 PM
What do these SD condo's rent for? A useful valuation principle in a declining market is 150X monthly rent. An investor can hardly go wrong with this formula since rents track the job market.
Posted by: Ben Brown | September 30, 2007 at 05:27 PM