San Diego resale housing activity logged its strongest January in three years:

And inventory declined somewhat, leading to a months-of-inventory figure that was just about half of what it had been in January 2008:

Higher demand and lower supply certainly can’t be a bad sign. But as I’ve often discussed, these county-wide numbers mask a lot of the nuance as to what’s actually going on.

For instance, the increase in overall sales activity over the past several months has been due largely to a huge rebound in activity among the lower-priced zip codes where prices have been hit hardest. Sale volume in many of the higher-priced areas, meanwhile, has actually been shrinking.

And while the amount of inventory for sale has steadily declined throughout the year, much of what does remain consists of foreclosures and other types of “must-sell” inventory.

My realtor friend Adam Rappoport, owner of G&R Realty, informs me of yet another nuance lurking beneath the surface. According to him, single family homes under the $700,000-$800,000 range, located in desirable neighborhoods, that “show” well, and that are competetively priced compared to similar properties, are generating substantial interest and multiple offers. Homes that are less desirable or priced too high, on the other hand, languish.

The mad rush for this “good inventory,” as he calls it, is a fairly new thing. And while the months-of-inventory chart featured above shows substantial improvement over last year, Adam contends that it significantly understates the tightness of supply for “good inventory.”

For purposes of calibration, I should note that this guy is a long-time housing bear who believes the bottom still lies well into the future. So he’s not trying to talk anything up, but just telling me what he sees.

It looks like what he sees is a yet more incongruity among different areas and segments of the local housing market. We’ll have to add it to our ever-growing list.


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