The Morning Report
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The Case-Shiller home price index for San Diego fell 2.1 percent between November and December, wrapping up the year with a 24.8 percent decline.
The graph below displays the total drop from the peak for each of the three price tiers in the index:
The price tier cutoffs are calculated by taking all homes sold in the measurement period and dividing them into thirds by price (cheapest third, middle third, and most expensive third). All three tiers have seen their cutoffs drop pretty dramatically lately — partially due to dropping prices, but mostly due to the fact that low-priced homes are selling much faster than expensive homes (as documented here last week).
Earlier in the bust, the high-priced tier looked comparatively strong, but December was the second month in which the high-priced tier dropped more than either of the other two tiers.
On a marginally brighter note, my thanks go out to reader Thomas who pointed out that while prices are still dropping, the speed at which they are doing so has declined. The next graph illustrates this effect by mapping the year-over-year rate of change in the aggregate Case-Shiller index starting at the November 2005 price peak:
Yes, home prices were down 25 percent for the year. That’s a lot. But the chart shows that, for now, at least, the price decline has decelerated. That’s what passes for good news these days.
— RICH TOSCANO