We knew this would happen, and it's happening later than we thought. We thought appreciation was going to come down. We definitely thought the entry and middle markets would be less strong than they are today.
The prices hit a new record, but the rate of increase at which those prices hit that new record was the lowest in four years.
Only if we have very short memories can we say there's a downturn in sales, or at least that sales are significantly low. This is actually as close to a normal market that we've had in seven to eight years.
But when prices don't go up as fast, you don't have that built-up equity like you did before. People won't have that buffer the way they did a year or two ago.
It appears that today's market is probably as close to what we would call normal as we've had in a long time.
I think we are in a fairly normal market here. The market we are comparing to a year ago was an abnormal market.
The rate of appreciation is coming down. We actually thought it would be lower than this by now.
What we're watching for here carefully are signs of a significant downturn, especially for price declines ... There are hiccups here and there but as a whole the market does not seem to be showing any signs of an impending decline.
When people got into trouble, they could tap into fast-building equity. Now that the equity is not building as fast, there's not as much to tap into in troubled times.
There are an awful lot of analysts and think tanks out there telling everybody in the world the sky is falling, and they have been consistently wrong.
We've had a doubling of prices in the last four years.
San Diego is the county that is kind of the furthest off into this uncharted statistical territory, so everybody's wondering what is going to happen locally. The big question there is will prices decline significantly or will they flatten out.
San Diego has easily been the county with the most (conversion) activity.
Once we have March figures, we'll have a much better indication of what's going on.
Demand is still very strong out there. The people who want to buy homes still outnumber the people who want to sell.
That part of the market is pretty stable, it's just that there's been across-the-board appreciation.
The ups and downs of default activity are clearly determined by whether prices are going up by 4 percent, or 14 percent or 25 percent annually. If it's worth more, you have more options.
There isn't a sense of urgency in the market. Buyers don't feel they need to stretch (finances) the way they felt before.
It's not that it's a particularly active market. It's just that more homes are in that category because of that rise in the rate of appreciation.
It's part of a broader trend. Nationwide there are markets that have a ways to go, especially in the Midwest. But we're much closer to the end of the cycle than the peak. Now we're watching how it plays out -- whether it's going to smash into a wall or just level off for a while.
It's still going up, not as fast as it was a half year or a year ago.
The boom part of the cycle is over. Most of the gains this time around are behind us. Now the question is how much of those gains do we get to keep.
It's clearly a market mix issue. Expensive homes are not selling as fast as inexpensive homes.
These numbers include condo conversions and (that) activity increased sharply last year. Since they are lower-cost homes, they pull down the median.
The million-dollar cycle hasn't completely played itself out in the more affordable areas, which include the Inland Empire. There is more to happen there.
In most markets, the boom phase of the real estate cycle is behind us. The market is reestablishing a balance between supply and demand, buyers and sellers.
I don't think they're less cautious. But they've just understood that they can sell more. There's just continued strong demand for homes, and the builders are trying to build homes that will sell.
The market could go into a lull phase for a while where prices flatten out because we've pulled a lot of (sales) activity from the future.
The frenzied period is behind us. But that's good, from a market point of view. The abnormal market was the one we had a year or two ago.
