Home Prices: Still Falling

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Median resale prices for both single family homes and condos fell in October from the prior month, by 2.7 percent and 1.3 percent respectively. That puts the year-over-year decline in median prices at 4.1 percent for detached homes and 6.5 percent for condos.

Many bullish analysts have been dismissive of declines in resale condo and new home median prices, preferring to keep the focus on the slightly more robust single family home market. It will be interesting to see what they make of last month's fairly steep drop in the single family median.

We here at voiceofsandiego.org suspect that a slightly better measurement of home price changes can be found in the median price per square foot. This measurement takes "bang for the buck" into account, at least to the extent that the "bang" in question comes in the form of increased square footage.

By this metric, detached home prices actually staged a weak comeback -- the first of its kind in six months. It's possible that the recent pullback in interest rates were supportive of home prices. But if that's the case, the support never quite made it to the condo market, whose median price per square foot declined 2.5 percent from September. The undeniable weakness in the condo market suggests that the detached market's middling price improvement may just represent statistical noise.

Since October 2005, the median price per square foot for detached homes is down 4.3 percent, and that for condos is down 5.5 percent.

The price per square foot data series appears to have peaked in September 2005. Thus far, the total decline from the peak has been 5.7 percent for single family homes and 8.7 percent for condos.

I'm certain the people at the National Association of Realtors will be positively stunned to find out that in San Diego, at least, home prices are still falling.

-- RICH TOSCANO