The last release of the Case-Shiller Home Price Index for San Diego shows that despite apparent strength in the alternative home price measurements, San Diego prices were still falling as of March.
It’s interesting to note that the size-adjusted median price and even the “plain vanilla” median price actually tracked the Case-Shiller HPI decently enough right up until December of last year, which is when the subprime lending market began to tighten up. This divergence supports the theory, previously advanced here and elsewhere, that recent median price increases are an illusion caused by a declining proportion of lower-priced home sales, and that they do not represent an actual increase in market prices.
More background on the different house price metrics can be found in a recent Nerd’s Eye View article on measuring home prices.
— RICH TOSCANO