San Diego’s home price decline continued in March, according to the Case-Shiller home price index:
For the month, the high tier was down 1.2%, the mid tier 2.3%, and the low tier 3.4%. Compared to earlier in the year, the month-to-month declines slowed somewhat for the high tier, even less for the middle tier, and imperceptibly for the low tier. That’s what passes for a spring rally in this market.
The following graph shows the three tiers’ declines from their respective peaks.
The loss of value is even starker when adjusted for inflation as measured by the CPI:
Here are some longer-term looks, first nominal and then real. As I’ve often discussed, the comparative thrashing being endured by the low end is largely due to the bubble in risky mortgage credit, which had the effect of causing inordinate price rises in the low tier and then resulting in mass foreclosures among those same properties.
Note that in CPI-adjusted terms, valuations are still well above the 1990 bubble peak:
From the November 2005 peak through March, the aggregate HPI had fallen 25.9%. It notably fell to just below the January 2004 value, meaning that we are now at an aggregate price level that hasn’t been seen since 2003.
My simplistic HPI proxy (based on the 3-month average of the change in median price per square foot) did a bang-up job this month, predicting a month-to-month decline of 2.3% versus an actual decline of 2.6%.
Updated for the actual March value, the HPI proxy projects a total decline of 28.2% in April.