San Diego Housing Market News and Analysis
July 2010 Resale Housing Data Rodeo
Submitted by Rich Toscano on August 12, 2010 - 12:28pm
In the first month after the [insert preferred double homebuyer tax credit catchphrase here], prices as measured by the median price per square foot were pretty much flat:
Same went for the vanilla median. Thrilling!
My Case-Shiller proxy, being a three-month average, crept up a bit largely due to the big price jump in May, but this will roll out next month and potentially lead to a decline:
So prices were a bit of an analytical yawnfest. Much more interesting was the action in sales and inventory.
As one would have expected post-double-tax-credit, sales declined. This was during what has been a seasonally strong month over the prior two years (sales were down in July 2007, but that probably has more to do with subprime implosion than seasonality).
Schahrzad Berkland, former prolific Econo-Almanac poster, local realtor, and proprietor of the San Diego Housing Forecast website, was kind enough to share with me her historical pending sales data so that I could do this next chart. Pending sales are a more timely way to measure demand than closed sales, because homes go pending when they go into escrow but don't typically become closed sales (and show up in a chart like the one above) until a month or two later. Pending sales also dropped in July, indicating declining closed sales ahead:
While demand was waning, supply continued to grow as it has all year:
Month of inventory accordingly rose (the months of inventory chart is updated to use pending sales instead of closings):
So here we are in the post-stimulus lull. The stimulus worked by pulling forward future demand, but we've now arrived at the point in time from which demand was poached. The concurrent rise in inventory puts the months-of-inventory figure awfully close to the 6-month line that has often marked the difference between rising and falling prices. If current trends continue, we will soon be at a level of inventory that has historically been associated with price weakness.
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