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Thousands upon thousands have made beating the stock market their business and in the process they have developed a few tools that can be applied to our real estate market. The first is the concept of moving averages. In the following graph, taking San Diego as a whole, we plot out the 10 and 20-month moving averages for the median priced 3-bedroom / 2-bath home.
We can visually see the crossover occurring in the July 2006 - July 2007 time period. Like any economist, we can tell you that it happened! The biggest challenge with the technique in the fast paced world of the stock market is that this crossover is a trailing indicator. By the time you see it, it is too late. I would argue that for real estate, there is enough of a time lag that you can see it happening. With that in mind, do you see it happening on the far right side of the graph? No... look again... no... neither do I.
As an investor, I look forward to seeing the market do a 180-degree turn, but apparently my rose colored glasses are getting rained on. If we look at the Jan 2005 -Dec 2006 as a model, turning that frown upside down, it would seem that we likely have another two years before we reach our next crossover.
However, all real estate is local. San Diego is too big of a market to assign it a single temperature. So, I am going to take this down to a zipcode level to see if there are any bright spots. I truly expect there to be some because in certain areas, I don't think the home prices can get much lower. I'll let you know what I find out.
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Robert T. Boyer, Ph.D.
San Diego's Finest Real Estate
RobertBoyer.Realtor@gmail.com
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Robert T. Boyer, Ph.D.
Licensed Realtor® #010791063
Real Estate Investor Advisor
Real Estate Financial Planner
(858) 755-2111
San Diego Foreclosures and
Real Estate Investments
Your San Diego CA Real Estate and REO Specialist
Centrally located in Carmel Valley
Serving North County San Diego Real Estate including: La Jolla, Del Mar, Carmel Valley, Rancho Santa Fe, Solana Beach, Cardiff by the Sea, Encinitas, Leucadia, Carlsbad, Oceanside, Vista, San Marcos, Escondido, Rancho Bernardo, Poway, Rancho Penasquitos, Scripps Ranch, Tierra Santa, Mira Mesa, University City
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1 Comments
on Are San Diego Home Prices Bottoming Out? Moving Averages Say Not Yet.
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San Diego Real Estate & Mortgage Loans | Robert T. Boyer, Ph.D. | VA Home Loan
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The San Diego Real Estate Housing Market tends to lead the nation's real estate activities. This blog looks at current activity and trend data, including sales rates, months of inventory, median home price, unemployment, inflation, etc., with an intent to provide timely predictions for our market. Because such a large part of the current market is make up of San Diego Foreclosures and REOs we will also look deeply at how they affect the current environment. Additionally, specific market segments are monitored, such as La Jolla Real Estate, Del Mar Real Estate, Rancho Santa Fe Real Estate, and Carmel Valley Real Estate
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Nice work Robert. I look forward to seeing some of the zip code level results.