Chuck Ponzi June 14th, 2006

Or… as the flipside is, a turd by any other name is… well… just a turd.

SignonSanDiego.com (San Diego Union Tribune) told us yesterday that San Diego County Home Prices take a tumble. While most of the people in the area know that SD county is wildly overpriced for the typical earner for the area, home prices are in a slightly downward holding pattern for the hottest period of home sales for the year. Word on the street from Realtors confirms that the true state of affairs is, “Slow, slow, slow”.

While many are quick to point out that the past few years were an outlier in terms of pace, it bears noting that the real estate agencies are still staffed like it’s 2005. The UT wrote:

San Diego County’s home prices took their biggest tumble for any spring on record last month, DataQuick Information Systems reported Tuesday.

That doesn’t bode well for sellers. One of our favorite cheerleaders for the industry was available for a lesson in the relationship of selling and semantics.

Leslie Appleton-Young, chief economist for the California Association of Realtors, said she no longer uses the term “soft landing” to describe the state of the housing market, but has yet to find a way to characterize current conditions.

“I’m searching for a new moniker,” she said.

You don’t say.

Spinning facts is much easier when we use words like “correction” instead of “crash”, “soft landing” instead of “bubble”. I am sure we will see many more iterations on a theme in the next year or 2.

While the 15K lost this month was something picked up over the course of a month leaving us at basically zero for a year with a slight uptic, we are in a vastly different market today than we were 1 year ago.

Housing markets are like a vast container ship that is fully loaded. The engines have been in full reverse since mid last year, but there is still forward momentum. Once that momentum comes to a stop, the engines will still be in reverse, and we will soon be moving backward. We have reached that inflection point at the end of last year/beginning of this year and the conditions have eroded even more with interest rates and economic indicators. All arrows point down at this point for our local economy. With some of the most expensive real estate, and options aplenty out of state, we will likely bleed many more people to out of state as construction jobs dry up.

Searching for a new moniker for the housing bubble does not change that we will indeed be seeing housing price declines. Soon, all kinds of people will be talking about how much prices have come down in my area.

Heck, even in my neighborhood, there is a 4 bed house for sale UNDER 700K and it is sitting! I’m sure this is a disappointment to my neighbor who closed on his much smaller house in July last year for 745K but inevitable when you view a home as an investment… investments go up AND down.

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