San Diego Housing Market News and Analysis

Let's have a look at how the year 2012 treated house prices, as measured by the Case-Shiller index.

This home price indicator lags by a couple months, but it offers a couple advantages. First, it uses repeat sales of the same homes, so it is more accurate than simply looking at a median price, which could be distorted by a change in the quality of homes sold.

Second, it breaks the sold homes into three price tiers, which allows us to separately analyze price changes for low-, medium- and high-priced homes. (The tier cutoffs are determined by simply splitting the sold homes into three equal-sized groups — the most expensive one-third of homes sold goes into the high-priced tier, etc.).

Here is the Case-Shiller index, for the three tiers as well as the combined index in black, starting at the early-2009 price trough:


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Home prices pulled back in January, despite increasingly tight inventory and robust sales.  Supply and demand will be discussed later; first, some graphs on prices. 

The median price per square foot fell on a month-to-month basis by .9% for detached homes, 6.4% for condos, and 2.3% in aggregate.  The graph below shows that such huge moves occur somewhat routinely for condos, so as always, it makes more sense to pay attention to the detached home line in blue.

The median price per square foot rose again last month.  Here are the stats...

Month to month:

• 1.9% for detached homes
• 1.4% for attached homes
  
• 1.8% in aggregate

For the Year 2012:

• 12.6% for detached homes
• 18.0% for attached homes
  
• 14.0% in aggregate

Here's a look at this price measure since the March 2009 trough:

Alright, let's take a look at the resale data for November...

Our old friend the median condo price per square foot continued its volatile ways, up 7.4% for the month!  Though that's after getting spanked the prior month.  That would be the volatility, which is why I prefer the much more reliable detached home median price per square foot, which was actually flat for the month.

Here's a look since the March 2009 trough.  Note that both series are now very close to their prior post-crash highs during the 2010 stimulus-fest.

Prices flattened out or maybe declined last month, depending on how you want to look at it... while the much less volatile detached home median price per square foot actually rose by .3%, the condo median ppsf declined by 3.3%, leading to an aggregate decline of .5%.

Inventory dropped again, prices rose again, and "The Chart" continues to do a bang-up job in indicating home price directionality...

Here's inventory, lest people thought last month's rise was the start of a new trend:

The Case-Shiller home price index is the most accurate measure of aggregate prices, and as such it is great for long-term comparisons.  It also provides a useful distinction by breaking the price data into three tiers of expensiveness.

The downside is that numbers are very "stale." The recent September release, for example, only has price data through July, and that figure actually is calculated from sales that took place as early as May.

Because I haven't done much in the way of long-term comparisons, and because there was little of interest in the tiered data (all three price tiers have been acting very similar to one another), I haven't done a CS update in a while.  Let's check in on the most recent numbers.

The recent increase in prices that I've been occasionally documenting is clear in this chart of prices since the post-crash (aggregate) bottom in 2009.  For the year-to-date throguh July, the aggregate index is up a bit over 5 percent, and the low, mid, and high price tiers are all up similar amounts:


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