Slight Housing Downturn . . . Do you believe it?

It seems all those who so energetically declared that the California and San Diego real estate markets were not in a ‘bubble’ as late as six months ago have now changed their opinions.

The consensus of opinion now is: “We are in the beginning of a cycle that is in a slight downturn.” In my opinion, they go it 50% right this time. Yes after about nine months of 30% monthly sales declines and the last three months of value declines, I would agree this is the beginning of a new downward cycle. But, to say that it will be a ‘slight’ downturn is really insulting to the intelligence of most rational thinkers. 

After ten years of an up market in San Diego, with the last five years producing double digit yearly housing appreciation, do you really believe our new down cycle will be over in a few months or  that it will be a slight downturn? If you answered yes, please look up the definition of denial.  

San Diego is already experiencing pockets of double digit home depreciation. By year’s end, double digit depreciation in our local real estate market will be front page news. It’s only when the tide goes out that you learn who’s been swimming naked. — Warren Buffett – View the entire San Diego MLS listings