San Diego real estate is very scarce. Most of San Diego open space is owned by the military, Government, and parks. So, San Diego real estate can never really go down much in value. If you don't buy a home in San Diego now, the rising prices will never let you purchase as good a value.

But a few years ago, it went something like this:

Act now! It's 2004 and you can still buy your San Diego home with no down payment, no need to prove employment, the option to pay or not on an irregular basis, below market interest rates for the first few years, monthly mortgage payments low enough that it will cheaper to buy a home than rent an apartment.

Already own a San Diego home? Why not get a home equity loan 25% more than the home is worth and go on that dream vacation and you can buy a speed boat on your return.

The San Diego media 'financial' commentators were all on board the real estate hype train; after all how could they say anything that would upset their real estate developer advertisers/sponsors?

What did the Government expect would happen with these types of enticements? The newspapers, media 'talking heads' Realtors, banks, appraisers, all fed the fire. Anyone who would even question the San Diego housing market excesses was immediately ridiculed and instantly labeled a 'bubble head' for their lack of 'true vision.'

The truly sad part of this lament is the fact that in late 2005, even after the San Diego month after month real estate sales figures were off double digits, and after most real estate developers were offering huge cash incentives, the main-stream media still did not raise any red flags. Instead it was 'just a return to normal' or “a great time to buy without the pressure of multiple offers."

So, for those who still blame this all on sub-prime loans, take off your rose-colored glasses and maybe you'll see that the real reasons were much more complex but founded on greed and the herd instinct. If we learn anything from this, it should be that basic economic principals cannot be ignored. When the siren call of a 'new paradigm' is again sounded, heed the lesson of the great 2005 San Diego real estate bubble.