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San Diego Real Estate Feeling “Bubbly” Already?

Here’s some good commentary from local real estate experts Fidelity Pacific in San Diego:

“In February San Diego home prices surged up and increased over last year by almost 20%. All home size ranges increased by double digits except for the 2500 to 2800 sq ft range which increased by about 4%.. Since October the San Diego housing market has had ever increasing double digit year over year price increases. This is long enough a period to establish a trend and by any rational evaluation this would be a price bubble. The causes of todays’ price increases is different than the past bubble period but the result is the same. In the earlier bubble the demand was stimulated by sub-prime mortgages and the overall lending practices in general.  Today, at least so far, lending has been tighter but the demand is being stimulated by artificially low interest rates. The issue becomes will the result of different forms of artificial stimulation end in the same result?”

The Fed might just get their “wealth effect” after all.  I am sure it will end differently this time.  🙂

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