April 2010 Resale Data Rodeo

Submitted by Rich Toscano on May 7, 2010 - 7:01pm
After March's surge to the upside, the median price per square foot pulled back in April:

Single family homes, condos, and the aggregate were all down around 1%.  But this is after a rise of about 5% in March, so prices by this measure are still the highest they've been since September 2008 (exclusive of the prior month, of course).

The Case-Shiller proxy, which uses a 3-month average, was up robustly once again:

As I said last month, I suspect that some of the recent price rise is due to compositional shift and thus not "real."  So while I do believe that prices are rising, I suspect that the real Case-Shiller index will show an increase that is more muted.

The vanilla median was more mixed than the median price per square foot, with condos pulling off an increase:

Sales were actually weak, falling over 7% in a month when they rose last year:

And inventory finally appears to be on the upswing:

Lower sales and higher inventory made for a jump in the months-of-inventory figure to over 5:

The increase has incidentally taken place in the active inventory category, so these are more actual homes for sale, as opposed to homes caught up in contingent status:

Here's what I wrote at voiceofsandiego.org about the decline in sales and (assuming the median price per square foot is providing a good read) pricing:

Why the dip?  It could be noise, but there's another potential explanation as well.  As many readers have doubtless read elsewhere, we are in a brief period in which Californians can get two home buyer tax credits: the Federal credit, and the new California credit.  (Why a state with serial budget crises is spending $100 million to render its housing supply less affordable is a topic for another time).  The Federal credit is good through June, but the California credit didn't start up until May.  So in order to double-dip, buyers need to close in May or June.

The idea I'm working toward is that some buyers might have wished to wait until May to close their sales, rendering April a weak month for closings... This lack of demand to buy in the month of April might have exerted some downward pressure on prices.

As I also wrote, if this is what's going on, we can expect this process to go into reverse next month.  So demand and potentially pricing could pick up further in the months ahead, at very least until the California tax credit runs out. 

Meanwhile, we are finally seeing inventory start to grow in a sustained manner.  If that keeps up it could lead to increased activity as more frustrated buyers' demands are able to be met. At the same time, it could take some wind out of the market's sales price-wise.
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