October saw an epic drop in the median price per square foot paid for condos, down 14.8% in a single month:
The plain vanilla median condo price was down an even worse 15.6%:
Single family homes, on the other hand, experienced a fairly typical monthly decline in both the size-adjusted and vanilla medians.
Clearly this is the result of a sizable shift in buyer activity towards low-end condos. We’ve all been discussing this trend for a while, but for whatever reason it made a dramatic impact on condos this month. The cheap stuff is apparently flying off the shelves.
My Case-Shiller estimate is, like the actual Case-Shiller index, calculated using only single family homes, so the wacky condo numbers didn’t affect it. The projected drop in the Case-Shiller index for October is pretty in line with what we’ve seen recently. (Note though that if the changing sales composition starts to impact single family homes the same way it has condos, these estimates will become a lot less accurate).
Volume was brisk yet again…
…and inventory dropped as well…
…leading to the lowest months-of-inventory figure in years:
The decline in the months’ worth of inventory accompanies another drop in foreclosure activity:
I thought last month’s NOD drop was due to the new state law requiring an extra 30 days’ notice, but SD Realtor thought it might be the start of something bigger as banks stopped initiating foreclosures while awaiting all the current and future bailouts. The continued drop in activity indicates that SD R may have been onto something. I will be very interested to see how these numbers look over the next couple of months.
While the supply, demand, and foreclosure trends are improving, this happens just as the employment picture is really starting to darken. Amidst these opposing forces we have the heavy hand of government pushing things around as well. How all these factors play themselves out remains to be seen, but the bearish factors are clearly winning out for the time being.