Before I begin, an administrative note: I am going to take the Econo-Almanac offline this weekend to upgrade the site software. This should help site performance and will result in some improved functionality as well.
OK, onto the rodeo. May was a bit of a weird month as far as the median price per square foot, known somewhat more briefly as the size-adjusted median, was concerned. In specific, the size-adjusted median for single family homes was completely unchanged from April, whereas it was down a brutal 5.9% for the month for condos.
A volume-weighted aggregate of the two property types was down 2.0% for the month.
I’m not sure how much of an aberration that condo number is. It could have something to do with the switch to new MLS software, but this doesn’t seem to have affected single family prices at all. And it could be noise, but the whackage was pretty extreme to just be noise. On the other hand, the contrast between condos and single family homes is probably the biggest disparity we’ve seen so I wouldn’t make too much of this one month’s condo behavior.
Still, if you do assume that this figure is representative of actual prices, condo prices are down 32.5% from the peak. Ouch. And the 28.0% decline in single family homes isn’t exactly a walk in the park either.
The plain vanilla median was relatively stable for both property types, as it has been of late:
My Case-Shiller HPI proxy (like the HPI itself) only includes single family homes, so the condo whackage didn’t have an effect. The proxy implies a moderation of the price decline in May, which may be as close as we get to a spring rally:
In brighter news, the supply and demand situation improved again. As the below chart shows, we were not that far off from the sales pace as of a year ago. This pace wasn’t exactly speedy, but May’s year-over-year comparison (-5.2%, to be exact), is a lot better than the 30%-plus annual declines we were seeing as recently as January.
Last month, according to data posted by SD Realtor, the volume boom was concentrated in the lower-priced areas that have been absolutely decimated in price, while the high end areas continued to languish volume-wise. If anyone has observations on the geographic volume disparities (and any geographic disparities, for that matter), we’d love to hear about it in the comments.
Inventory also improved, as we were a just hair’s breadth from last year’s level:
These two stats combined for make for another big improvement in the months-of-inventory figure, which also came within striking distance of last year’s level. The current 7.6 months of inventory is still in or near bear market territory but as you can see it is a huge improvement from what we were seeing earlier in the year:
The significance of the total inventory figure has been a matter of great controversy here at the Pigg. The question is how meaningful the decline in overall inventory is when the future supply of must-sell inventory (the most damaging kind) continues to skyrocket:
I myself don’t see much of an aggregate bottom coming anytime soon while foreclosures continue to pile up at such record-shattering rates. The 1990s bust saw prices fall for 6 years in the face of a foreclosure rate that was barely more than 1/3 what we are seeing now. The pickup in sales is certainly a candle in the dark, but it just doesn’t mean all that much when those sales continue to be overwhelmed by a torrent of new foreclosures.