John Trucillo, former Chief Economist for the National Association of Realtors, is the smartest person I've ever met on the subject of the real estate market.
In the September-October edition of "The Real Estate Professional" magazine, John stated that "Most of the metropolitan areas in the United States have housing markets that have stopped declining and are stabilized, poised for the upside of the cycle."
I believe he is correct, at least as far as San Diego and Rancho Bernardo are concerned. We are at or near the bottom of the market now.
So, how bad has this down cycle been? I have tracked market trends in Rancho Bernardo every month for many years. The average sales price for a detached home in zip code 92128 topped out in mid-2005 at $671,272. In the past six months, the average sales price was $573,521.
This means home values in this area have dropped 14.6% from the peak. It may vary a little from neighborhood to neighborhood but RB has done well compared to other San Diego communities where prices have fallen 30% or more from their 2005 high mark.
And the inventory of homes on the market in Rancho Bernardo is fairly low. For example, in 1995 at the bottom of our previous down market, there were between 90 and 95 detached homes in Seven Oaks on the market at any one time. Today there are just 29 Seven Oaks homes on the market.
The bad news: Many homes now on the market are bank-owned foreclosures that are priced very low. When those homes sell, they will probably drive values down a little further. Of course, this is a golden opportunity for potential home buyers.
I predict that, once the bulk of bank-owned properties are sold, the market will rebound quickly. Hopefully, our RB home values will be on the rise a year from now.
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