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Friday, March 20, 2009 | Your resident real estate bear, Rich Toscano, claims to be puzzled about how resale home sales are holding up (March 13). Maybe he should read his own columns.

In his March 12 column, he noted that housing prices are down more than 45 percent since their Sept 2005 peak. If he read another local paper (or the USD index of economic indicators) building permits are down by 2/3, meaning the supply of new housing will be drying up.

Some people are buying because they’re new to the area and need shelter, and some are buying because they didn’t want to buy at the bubble prices. Although Southern California real estate has been vulnerable to recessions (during the 1960s-1980s, mostly due to aerospace layoffs), over the long term, the value of land has proven to be a good investment.

San Diego’s housing bubble burst at least two years before the rest of the state, so it’s reasonable to assume that the bargain-hunting and bottoming out will also happen here ahead of the rest of the state. At some point, the local bear market in real estate will come to an end, and Mr. Toscano will have to find another note to play on his lyre.

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