Our main area of focus is the North San Diego County Coastal region, which includes La Jolla, Carmel Valley, Del Mar, Solana Beach, Rancho Santa Fe, Cardiff, Encinitas, and Carlsbad.

To gain some perspective on where we’ve been, here are the number of NSDCC detached sales in May, and their average cost-per-sf:

While homes certainly are cheaper, they aren’t cheap. 

Why hasn’t there been a further decline?

The median price has only dropped 15% since the peak of May, 2006 (1,050,000 to $891,000 last month).  But the mortgage rates are about 2% lower than 2006 as well. 

The payment difference between the two median prices with 20% down payments?  Combining the lower median price with the 2% lower jumbo 30-year fixed rate equals a payment that is 32% less than in 2006.  (7% on $840,000 = $5,588 vs. 5% on $712,800 = $3,826, a difference of $1,762 per month).

The doomdayers are guaranteeing higher rates when QE2 expires later this month, but when the Fed stopped buying MBS last year, the rates went down.  Ben and the boys are hoping that’ll happen again, but if they don’t, they’ll probably crank up QE3, instead of another housing tax credit.

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Jim the Realtor
Jim is a long-time local realtor who comments daily here on his blog, bubbleinfo.com which began in September, 2005. Stick around!

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