I was Just checking out the Premium content Housing Market Report and found a very surprising statistic.
I hope I’m not beheaded for posting premium content in the non-premium section.
So, you are going to take a quiz. Don’t cheat. Read the question, guess a number, then scroll down to see the answer, and post your guess. I’m curious how people’s perception of the market lines up with reality. Mine was way off, even though I see the numbers regularly. But first, some history:
Premium contents shows a median (SFR) price increase from June 2004 to May 2006 (23 months) of … what … can that be right? 5%. I would have guessed 10 off the top of my head.
What did you guess?
5% in two years? That’s about 5% from June 2004 to June 2005, and flat since. This whole bubble deflating thing is wierd. They always say you don’t know the bubble is bursting until you realize it has already burst. Even though I watch this site closely, Premium content shows it is farther along than I thought.
Just like a good quality tire hit a nail, the air does not come out all together, you won’t even feel the
‘flat tire’ effect, but gradually you feel a bit tilt
when driving but not so big a deal, may be a month later, that tire shows a bit soft, drive on? No problem, then one day, you ‘see’ the flat tire, oh, my god, I got get to the shop to get it fixed… well, a bit damage here, a bit damage there already …
This San Diego housing cooling status is like a good
tire gets flat slowly…
Looking downtown condos, for example, many units sell for less than what they paid for in 2004-2005 already,
with monthly sale of 45-48 units (so far), the current inventory of 650 will take more than 10 months to consume, but do you know something? People are waiting out, so the sales figure may drop as well, more inventory, fewer sales only lead to 1 result: price reduction…
Someone was saying that there is no way to see 2003-2004’s price, but do you see it?
No surprise to me. I’ve said numerous times the market peaked in Spring 2004 and has been flat since. The changes in the median have more to do with what house is represented by the median than increasing prices. Slower sales at the lower end also impact it because short term rates that entry level buyers depended on have risen sharply. If you plotted the median price/sq ft I suspect you would see a pretty hefty decline.
It makes sense to me. I was in the market to buy in June of 2004 (townhouse or something in Scripps Ranch). Equal sized homes in the same complexes are selling for the same price or less than what we would have payed, but the inventory has tripled.
So, as has been observed before, the median #’s are still OK, but only because people are getting much more house for the same $, correct? In other words, there are people out there still willing/able to spend, say, $750k on a house in N. County, but the houses they are getting were the $850k+ ones from 1-2 years ago.
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