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The Case-Shiller Home Price Index for San Diego fell 1.3 percent between July and August, a steeper month-to-month drop than had been seen since early 2007. According to this price measurement, San Diego single family home prices were in aggregate down 8.3 percent from August 2006 and 9.4 percent from the HPI’s peak in November 2005.

Note that these figures do not take into account the recent mortgage tightening on more creditworthy borrowers, the effects of which did not really begin to show up until September. Interested parties are directed toward previous discussions of the phase two credit crunch’s impact on pricing and demand.

The accompanying graph displays the Case-Shiller HPI’s path from its November 2005 peak to August 2007, the latest month available. Also shown on the graph are the single family home median and size-adjusted median prices for comparison, these two being charted through September.

The graph indicates that the divergence between the median price and the HPI rapidly began to close last month as the credit crunch started to hit the higher-end borrowers. However, the median’s plunge last month was no more a true representation of prices than was its apparent strength up to that point. We will get a better read of the mortgage tightening’s actual impact on home prices when the September HPI is released in a month.

— RICH TOSCANO

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