San Diego Housing Market News and Analysis

Supply is still tight out there, with February's months of active inventory lower than either of the past two years:

December is always an unusual month in that closed sales typically increase (presumably people trying to jam the deal through before year-end), while pendings sales drop (presumably due to holiday disruption):

Prices have flattened out over the past few months, as might be expected during this time of year.  This is most easily seen in the Case Shiller proxy, which uses a 3 month average:

While the scarcity of inventory has eased a bit, supply is still pretty tight in the grand scheme of things.  Prices have accordingly continued to be pressured upwards, with the price per square foot experiencing a 2% pop last month.  Here are the MoM and YoY stats...


...and here is the single graph that I think best sums up the state of things (showing as it does the relationship between months of inventory and price changes, as well as recent trends in both those things):

Once again, the traditional "Shambling Towards Affordability" title for this series proves inapt.  The market does have a bit of a shamble to its step, but the direction in which it lumbers is distinctly un-affordable.  (In price terms, anyway... low rates do ease the sting, but that's a separate topic to be addressed below).

While valuations have crept up a bit over the past year, the big picture hasn't changed much: home prices are significantly higher, when compared with local rents and incomes, than they typically have been over the almost 4-decade history of the data:

The local housing market was looking strong as of last month.  Prices continued to creep higher, sales were robust, and inventory, while slightly higher, failed to outpace the increase in demand.

Months of inventory is not as low as it was during the 2013 feeding frenzy, but it's just about the lowest since -- if that doesn't change, we can expect further upward price pressure immediately ahead.

Hi all.  Not much has changed from last month's update, so I'm just going to do a chart dump and dispense with the words.  Starting now.