How does your SFR stack up to the median?

Some people have claimed that better neighborhoods will be "insulated" from prices drops.

I believe that

1) Prices will go back to 2000 nominal levels, or perhaps below 2000 if there is an overshoot. If a neighborhood holds-on better than one with more foreclosures, then I expect a period of stagnation for the better area while the other neighborhoods slowly rise.

2) Everything is interconnected so if one neighborhood goes down, then other neighborhoods will, in time, go down as well, because of the principle of substitution.

I went back to 1998 and 1999 so see how each neighborhood's median was in relation to the County median. The historic proportions between neighborhoods are what's important.

For example Carmel Valley was about 2.2 times the median. But in December 2008, Carmel Valley's median was $1,007,000 or about 3 times the median of $332,500. That "premium" will not hold the test of time. Either, the County median will rise or the Carmel Valley median will drop. I'm betting on the latter.

Click on the picture below for a view of the SFR data. I'll post the condo data later.




How does your neighborhood stack up?

The data was obtained from the San Diego Union Tribune