The median price per square foot of San Diego resale homes took a
bit of a hit last month, down 2.5% for single family homes, .3% for
condos, and 1.9% in aggregate. (The single family home price
series is tends to give a more dependable read on the state of
pricing power). On a year-over-year basis, the median price
per square foot was down 8.9% for single family homes, 4.4% for
condos, and 7.5% in aggregate.
The Case-Shiller proxy, which based on a three-month average of the
detached home median price per square foot, fell by an even
1.0%. That’s down 6.0% from last November. Recall that
the “official” Case-Shiller index hit a new inflation-adjusted
low as of September — it looks like we’ve fallen a couple
percent further since.
Below are versions of the above graphs gridlined and aligned with
calendar years in order to help elucidate the effects of
seasonality. Clearly, we are in what tends to be the weak
Closed sales dropped by 3.4% for the month, a smaller decline than
we’ve seen in recent Novembers. They were up 10.1% for the
Pending sales fell by a scant .8%, which is also better than the
typical November drop. Pendings were up 8.4% from a year ago.
Inventory was down by 4.7% for the month and down 13.6% from a year
That left 5.1 months of inventory, down 3.9% for the month and 20.3%
from last November.
This is actually a fairly healthy level of inventory, comfortably
below a level at which the market could be considered
“oversupplied.” It’s interesting that prices have been weak in
spite of the reasonable level of supply and the unreasonable lowness
of mortgage rates. We are of course in a time of year in which
prices tend to get pressured lower, all other things being
equal. The market also has a lot of foreclosure inventory and
a fairly anemic economy to contend with.
The negatives have gotten the upper hand lately, but I don’t think a
serious decline is in the works barring a major change in macro
factors such as rates and employment. A slow, unsteady grind
towards lower housing valuation seems to be the more likely outcome