October 2008
As home prices went up 140% over the last 8 years in most areas in San Diego County and income barely has increased (household income did increase a little bit more: but do we want to work with 2, 3 even 4 people in a household to afford the home?)
Low interest rates are over, 7% or higher now if you have excellent credit (o points, August 2007, most banks). In 2005 rates of 5.8% were possible.
Summarized, we can borrow rougly 20% less for the same monthly cost, so home prices are stable or go down as absolutely nobody can afford it
Some people still pay 60% of their income in loan payments, the other group has to sell as payments went up due to their "flex loan" .
Summarized, GNP might still increase, or so called economic growth is slow but still growth. But we do not take in account that people save less, their stock is worth 20 % less (since 2005) and the house does not increase in value, so no equity just paying 3,4,5,6 grand a month interest only payments out of your pocket (renting would have been half the price).
The overall median last year of nearly $500,000 represented a more than doubling of San Diego County's home prices since 2000, when the average property sold for $234,000.
San Diego County resale house prices tumbled last month by the biggest number in 18 years of record-keeping and contributed to the smallest year-to-year rise in overall prices in six years, DataQuick Information Systems reported Monday.
The median resale price in San Diego County for existing single-family homes dropped $15,000 from November to December to stand at $550,000, the largest month-to-month decline since DataQuick began keeping records in 1988.