Powayseller – A couple of things you mentioned – You say 44,000 people have moved out of San Diego, but the total population of the County is actually still growing, due in large part to immigration and the birth rate. According to the State Dept. of Finance, the County population grew almost 1% from 2005 to 2006. That’s not much growth, but it’s better than nothing. High home prices do discourage people from moving here, and encourage others to leave, but there is still growth. If population growth were a negative number, then housing prices would have to drop more than the small decrease that has already happened in some areas.
Also, you say that there are 8 buyers for every house. I don’t know where you get that number from. In June there were 4400+ resale homes and condos that closed escrow. If there are 23,000 homes and condos on the market, there is a little over a 5 month supply of homes on the market. That’s the sign of a fairly flat or stagnant market, but not a horrible market. Also, some of the 23,000 listings are new homes and condos and shouldn’t be counted, because I’m not counting new home sales in the 4400 sales from June. If we get to a 8 or 9 month supply of homes on the market, then we’ll have a really bad market.
Regarding median home prices, I do think that the numbers are very useful. There is no 18 month lag in reporting the figures – there is really only a two month lag. The sales reported in June are for homes that mostly went into escrow in April or May. When you look at the monthly prices by zip code, those figures are completely useless, due to the very small sample size in some areas. But when you compare prices for the whole County to the same period one year ago, the numbers have always seemed pretty accurate for the typical home, and I’ve been watching the reported median prices since the 1980’s. And when you compare prices for the County for all 12 months of 2006 to all of 2005, then I think you have a pretty reliable portrayal of the market. I don’t think that the current figures are skewed by more sales of higher-end homes.
OCrenter – It seems to me that the market now is fairly similar to the market in 1990 or 1991. I don’t have the exact figures, but I think that if you adjust for the population increase since 1990, that the inventory numbers are similar. One thing that has to be hurting the new home market, and resales of nearly new homes, is that builders have had to boost prices way up to cover huge increases in building materials, (especially concrete, asphalt, and plywood).
