The single family median price/sqft got smoked for almost 6% in December, but that is likely due to compositional effects (a change in what’s being sold) as opposed to a “real” change in the market value of housing. (By comparison, condos — usually more volatile — fell by less than 2%). This is just the kind of thing that shows up in a noisy data series like this. I think the takeaway is: whatever the actual change in home values might have been, it was likely to the downside. And of course we’ll have a much better idea with the release of December Case-Shiller index, which measures same-home sales to eliminate the compositional problem. The CS index is estimated in the graph below:

More generally, we continued to see the standoff between very low sales activity (kissing the GFC lows):

…and low inventory:

… resulting in an actually kind of normal months of inventory:

Meanwhile, the decline in mortgage rates provided some relief on the affordability front, but monthly payments are still sky high:

More graphs below, and I plan to update the valuation graphs soon.