Southern California is a sunny, optimistic place. I guess that's why people here keep thinking that the bottom of the real estate market is just around the corner.
DataQuick analyst John Karevoll interpreted the prices and sales as a sign that San Diego real estate may be nearing the bottom of the post-boom period.
“Most of the declines in San Diego have happened,” Karevoll said. “Now it appears to be re-establishing a balance that we have yet to see for the (Southern California) region.”
Can't blame people for hoping, but this just goes to show how short our memories are. For example, take a look at this graph on San Diego residential real estate prices. It compares the 1987-1996 cycle (whith a peak in July 1990) with the current one (peak in November 2005) using the Case-Shiller price index.
Cycles are never identical, but they sure do seem similar so far! In the 1990's the peak-to-trough price fall took six years to be completed, so it's quite likely that the downward part of this cycle still has quite a ways to go.
P.S.: I promise that there'll be no more snarky biblical-themed titles!