http://realpropertyalpha.disqus.com/Investment Real Estate, Incremental Innovation, and A Spreadsheet for EverythingenWed, 08 Jul 2009 23:37:25 -0000http://realpropertyalpha.com/2009/07/07/list-pricesale-price-ratio-corona-ca/#comment-12362864Excellent data on the Corona situation. Based on 1st hand experience of this mkt, I would agree that the bottom fell out in 2nd half 2007. One could have used this early indicator &amp; shorted the equities market in all of 2008 &amp; made out like bandits. Couple of datapoints that are not consistent w/ these charts - <br>1) loopnet still lists Corona CRE properties @ 7-7.5% cap rates today, not sure where they were in 2nd half 2007, but it sure feels like cap rates haven't climbed too much <br>2) the list/sale price ratio has generally hovered around ~1, even when the mkt was free-falling. Does this mean that the market was extremely efficient in setting prices ? And if that is the case, the cap rates of 7-7.5% must reflect reality. Of course, vacancy rates are higher, and rents have fallen. So from purely income capitalization perspective, valuation has tanked (even with relatively stable cap rates). If one has the ability to ride this out (i.e. loan is not coming due soon), it seems like pricing will generally improve as the economy improves (I agree w/ you about calling the bottom, it will only be clear in hindsight).anonWed, 08 Jul 2009 23:37:25 -0000