It was more of the same for the median-based home price indicators last month. The median price per square foot for single family homes fell 2.6 percent for the month, racking up a decline of 27.8 percent for the year and 42.7 percent from the September 2005 peak of this measure.
Condos have fared even worse, with the size-adjusted median down a brutal 7.8 percent last month and down 36.3 percent for 2008. I’ve had to increase the scale on the accompanying graph now that the size-adjusted median condo price has dropped over 50 percent from the peak (51.0 percent, to be exact).
A combined aggregate of the price indicators for condos and detached homes was down 4.0 percent for the month, 30.5 percent for the year, and 45.4 percent from the peak.
A chart of the not-adjusted-for-size median price, oft-quoted by analysts, would be a lot bumpier and more volatile but would tell pretty much the same story.
It’s not clear how much of last month’s decline was caused by the shift in activity towards cheaper homes and how much was caused by an actual decline in home values. Such is the problem with using the median price, which measures how much the typical buyer paid without adjusting for how nice a home he or she got in return.
The most recent Case-Shiller data for October compares subsequent same-home sales to indicate that home prices were indeed falling at that time. It’s probably safe to assume that they are still falling, though probably not quite as fast as the median-based indicators make it seem.
— RICH TOSCANO