http://blog.redfin.com/sfbay/2008/05/weekly_news_round-up-24.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 http://blog.redfin.com/sfbay/2008/05/weekly_news_round-up-24.html/comment-page-1#comment-4417 susan.brady Wed, 07 May 2008 20:59:19 +0000 http://blog.redfin.com/sfbay/2008/05/weekly_news_round-up-24.html#comment-4417 David - thanks for the analysis. I can always count on you to go the extra mile to explain things. I really do appreciate it! David – thanks for the analysis. I can always count on you to go the extra mile to explain things. I really do appreciate it!

]]> http://blog.redfin.com/sfbay/2008/05/weekly_news_round-up-24.html/comment-page-1#comment-4413 David Wed, 07 May 2008 17:56:31 +0000 http://blog.redfin.com/sfbay/2008/05/weekly_news_round-up-24.html#comment-4413 The Zillow feature is pretty awesome. It confirms several logical assumptions that were previously just assumptions of mine: 1) The bust is very symmetrical. MSA's that boomed earlier (San Diego, Boston, etc) are further ahead in the bust, and back to 2003 prices. MSAs that boomed later (SF, Milwaukee) are behind in the bust phase, and are back to 2004 or later prices. 2) Homeowners are delusional about their own values. 3) Even with busting back to 2004 levels in SF MSA, the annualized price increases since 2000 are high, and unsustainable (6%+ annualized). This indicates a lot of room for continued price drops. 4) The price increase over the past 5 years for SF is 4% annualized, a much more "normal" number. This will become the trendline back to 1997-2000, the end of the last bust when this round is over. Therefore, we have either another ~15% of nominal price drops over the next year, or flat prices until 2011, or some combination of the two. My bet is for another 10%ish drop over the next 12-18 months and then flat prices until 2011 or 2012, depending on exact 'hood, etc. The Zillow feature is pretty awesome. It confirms several logical assumptions that were previously just assumptions of mine:
1) The bust is very symmetrical. MSA’s that boomed earlier (San Diego, Boston, etc) are further ahead in the bust, and back to 2003 prices. MSAs that boomed later (SF, Milwaukee) are behind in the bust phase, and are back to 2004 or later prices.
2) Homeowners are delusional about their own values.
3) Even with busting back to 2004 levels in SF MSA, the annualized price increases since 2000 are high, and unsustainable (6%+ annualized). This indicates a lot of room for continued price drops.
4) The price increase over the past 5 years for SF is 4% annualized, a much more “normal” number. This will become the trendline back to 1997-2000, the end of the last bust when this round is over. Therefore, we have either another ~15% of nominal price drops over the next year, or flat prices until 2011, or some combination of the two. My bet is for another 10%ish drop over the next 12-18 months and then flat prices until 2011 or 2012, depending on exact ‘hood, etc.

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