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The size-adjusted median price of existing homes sold in San Diego actually… wait for it… increased between March and April.

While the size-adjusted median price of detached homes just barely eked out a .1 percent increase for the month, the routinely brutalized condo median rose by a whopping 8.7 percent. A volume-weighted aggregate of the two rose by 2.3 percent from March.

This was the first increase in San Diego’s aggregate size-adjusted median since May 2007.

As I’ve discussed here frequently and at great length, increasing median prices do not necessarily mean that home prices themselves are rising. The size-adjusted median price measures how much money per square foot the typical San Diego buyer paid — square footage aside, it does not take into account what the buyer got in return. So it’s possible that the median-based price indicators could be thrown off by changes to the mix of what homes are being purchased.

This is actually what was going on in spring of 2007, mentioned above as the last time in which the size-adjusted median price rose. At that time, the rise in the median was actually an artifact of a shift towards relatively more high-priced sales homes as a result of the implosion of the subprime mortgage market. The Case-Shiller home price index, which is based on same-home sales and thus avoids the problem described in the prior paragraph, shows that San Diego home prices never actually rose during 2007. According to the Case-Shiller index, the last legitimate rise in aggregate home prices actually took place in June 2006.

Unlike in 2007, there is no evidence of a shift towards higher-priced properties in recent months. In fact, the trend lately has been heavily skewed towards increased activity in lower-priced areas.

It’s possible that this trend went into reverse last month, but it’s also possible that home prices did legitimately rise for the month. Spring price rallies are common even in the midst of housing busts — in the 1990s downturn, home prices (actual same-sale prices per the Case-Shiller index, not median prices) rose in every spring selling season except for one. And while there is much rightful hand-wringing about the shadow inventory of foreclosed properties that could hit the market in the future, the fact remains that the supply of homes for sale right now is fairly low compared to current demand.

So we’ve got a seasonal tendency for prices to rise along with tight (for the time being, at least) inventory. The first spring price rally in three years might just be underway.

— RICH TOSCANO

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