A Tale of Two San Clemente Real Estate Markets

Posted on Mike Cotter's blog, sanclementerealestateblog.com by mikecotter

With apologies to Charles Dickens.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us….”

So begins A Tale of Two Cities (1859) by Charles Dickens, one of the most famous novels in the history of literature.

But these memorable opening lines seem to describe not only Paris during the French Revolution — but also San Clemente’s current real estate market.

Best of times, worst of times: An incredible shrinking inventory should raise market prices, but San Clemente prices have been falling.

Age of wisdom, age of foolishness: We have learned a lot about the perils of “no money down” real estate investing, but you can still get a government-guaranteed home loan with just 3.5 percent down.

Epoch of belief, epoch of incredulity. We trust that the government wants to spur the economy, but, honestly, how much lower can mortgage interest rates go?

Season of light, season of darkness: The Internet has made the real estate market transparent for everybody, but short sale lenders and bank property owners act like we’re in the informational Dark Ages.

Spring of hope, winter of despair: Consumer confidence is climbing, but the market is still largely controlled by distressed property owners.

Everything before us, nothing before us: Real estate is traditionally the way to grow wealth in California, but those who bought their first home in the last five years may never want to buy one again.

Maybe this is just the way any real estate market is going to look after five years of downturn—a picture full of dichotomies.

It’s hard to predict the bottom of any market, especially in the short term. But eventually our multi-trillion dollar national debt is bound to stoke the embers of inflation.

And long-term local real estate appreciation is generally equal to the local rate of inflation.

For more on the San Clemente housing market, check out MCotter.com, especially latest market statistics and neighborhood stats.