The Union-Tribune has some January San Diego housing statistics up. In short, prices were down from December, but still slightly positive year-over-year. Resale homes and condos did fine, while new homes once again absorbed the brunt of the price damage–the median new home price was hammered for a $104,000 loss on the month!
The underperformance of newly-built homes is to be expected: unlike private home sellers, who have the luxury of trying to wait to get the price they want, new home builders have to take whatever they can get and unload the inventory ASAP. Additionally, the fact that so many new homes are low-grade condo conversions surely drags the median down somewhat (though that factor is no doubt partially mitigated by all the incentives offered by builders, which artificially overstate sale prices).
As always, I will examine prices, volume, and inventory in much greater detail in the "monthly housing report" once I get my DataQuick data in a couple weeks.
February 13, 2006 @ 7:42 PM
Inventory is up, sales are
Inventory is up, sales are down, yet the median price is hanging in there. Why are sellers getting only about 5% less than they were in December, when there are so few buyers, and those buyers have so much choice? I wish the MLS data would be more readily available, so we could get more information on what is going on in this market. The Dataquick numbers, while informative, are lagging, and don’t tell us listing prices, % of listing price offered, # of pending, etc.
February 13, 2006 @ 11:52 PM
Yes, there is a lag, as much
Yes, there is a lag, as much as 3 months. The numbers we just received for January reflect buying decisions that were made as long ago as November. We won’t have sales and price info that reflects present activity until April, maybe May. Plus, I think that there are still a lot of “greater fools” out there. Keep in mind that the average citizen gets most of their real estate news from the Union-Tribune, who used the headline “Countywide House Resale Prices Inch Upward” to report January’s numbers – not exactly a headline that will cause fear and panic amongst potential homebuyers. Also, most people don’t pay attention to the housing market like we do. And we’ve barely begun to see any of the huge numbers of desperate buyers that I believe we will eventually see, and who will lead the market downward.
February 14, 2006 @ 8:22 AM
I noticed the headline too.
I noticed the headline too. The article is full of news that varies between bad news for prices and alarmingly bad news for prices, and yet, somehow they distilled “Prices Inch Upward” out of that. I suppose it’s the least dishonest way they could headline the article without getting the RE world up in arms. I guess the Union-Tribune knows who is buttering its bread…I wonder what percentage of its ad revenue comes from real estate and real estate-related business.
February 14, 2006 @ 6:32 AM
Keep in mind that the median
Keep in mind that the median price only tells you what people are spending, not what they are getting for their money. What I observed in the last SoCal bust (working as an agent) was that when the buyers finally had choices, they kept spending the same amount. BUT- they got the bigger house, the more upgraded house, the better location, etc etc. The crummy houses in poor locations that would have been snapped up last year just sit on the market. To know what is really going on in a local market, you need to know specific neighborhoods and watch the prices to see whether a given house would sell for more or less. The median price can be a general indicator, but a steady median price does not necessarily mean that the buyers out there are not striking much better deals for themselves.
February 14, 2006 @ 9:22 AM
The laws of Supply and
The laws of Supply and Demand seem to be working for new homes, as Homebuilders cut prices to stimulate waning demand. But, the industry “experts” say that resale prices tend to be sticky, on the way down as re-sellers refuse to lower their price…
It seems logical to me that, the resale market should also follow the laws of supply and demand. Just because Neighbor Joe is too stubborn to lower the price on his house, doesn’t mean that the bids on his house haven’t fallen.