The Morning Report
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The Case-Shiller index numbers for September are in. As had been suggested by the median price data, the aggregate Case-Shiller index ended up rising for another month.

There was an interesting divergence, however. The aggregate index rose by .9 percent between August and September, while the low and medium price tiers each rose by 1.8 percent. But the high-priced tier actually dropped by .9 percent. This is the first drop in any of the index tiers since the price bounce began in early 2009.

The weakness in the high tier stands in stark contrast to the subprime implosion days when lower priced homes were taking all the abuse. But such a turnaround was not unexpected considering that lower-priced homes have enjoyed substantially higher sales volume in recent times. For a while now I’ve been taking occasional looks at how fast cheap homes were selling in comparison to expensive ones, and while the trend had moderated quite a bit as of the last update, demand was still notably higher for low-priced homes. This greater demand naturally has translated into stonger price trends. (Unfortunately, I am no longer able to update that particular analysis because the Union-Tribune stopped publishing the data — my theory is that their new owner needs the money for chest waxings).

To the limited extent that we can draw conclusions from a single month’s data, it appears that as we head into housing’s slow season the weaker demand for higher-priced homes may finally be taking a toll.

— RICH TOSCANO

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