San Diego Housing Market News and Analysis
October 2012 Resale Housing Data Rodeo
Submitted by Rich Toscano on November 19, 2012 - 7:29pm
Prices flattened out or maybe declined last month, depending on how you want to look at it... while the much less volatile detached home median price per square foot actually rose by .3%, the condo median ppsf declined by 3.3%, leading to an aggregate decline of .5%.
The above chart begins at the bubble peak; for kicks I made one starting from the 2009 trough:
You can see what I mean about much greater month-to-month volatility in the condo ppsf. For what it's worth, I tend to pay a lot more attention to the detached home series for that reason. The detached numbers can be further smoothed by taking the 3-month average, which I have done in the chart below in an attempt to approximate what the Case-Shiller index (which also uses the 3-month average for detached resale homes) will show when it comes out:
Now let's move on to inventory, the lack of which has been helping out prices all year. As is typical this time of year, inventory has been falling -- what's unusual is that it does so from such a low level:
The chart above includes both active and contingent (typically a short sale awaiting bank approval) inventory. You could argue that contingent inventory isn't really "on the market" (at least not at the moment, though it may return to the market) -- in this case, it's really only active inventory that new buyers can go after. And contingent inventory has reached an all-time high compared to active inventory, as the following chart shows:
Here's how things look if we just chart actives:
Note that there is about half as much active inventory as there was a year ago! And yet, sales volume is the highest (for October) in at least three years:
As a result, months of inventory is plumbing new lows:
Here's the chart I've been emphasizing that shows the strong relationship between months of inventory and prices:
Prices do tend to weaken in the fall and winter months, but I wouldn't expect much of a price decline for as long as months of inventory remains so exceedingly low.
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