On many mortgages, reckoning day coming [Southern California]
Hindsight, they say, is 20-20.
And with the benefit of two years of hindsight, it’s clear that June 2005 was the height of the wacky season for the San Diego County housing market – which has potentially fearsome implications for home prices this summer.
By June 2005, the local real estate market was beginning to fray. Home prices, which had been growing by double-digit percentages for more than five years, dipped to 9 percent appreciation in May and 6 percent in June. Home transactions in June were 9 percent lower than the year before, foreshadowing a major slowdown.
Nevertheless, there were thousands of eager buyers. And if they couldn’t afford a 30-year fixed-rate mortgage with a 20 percent down payment, there were adjustable rates, zero down payments, interest-only loans and negative amortization.