We saw last week that San Diego resale home prices finally paused in their multi-month ascent, so I wanted to follow up with with an accompanying look at sales and inventory. Permit me a couple of administrative notes beforehand.
First, I stated a couple weeks ago that the Union-Tribune had stopped publishing their zip code-specific housing data. It turns out that they are still publishing it in the print edition; they had just stopped updating the online data that I was using in my spreadsheets. Sorry for the confusion. I am told that the data will be offered online again at some point, as well.
Second, now that the whole site is being overhauled, I thought it was a good time to update the look of my beloved graphs so that they fit in with the site look and feel a bit better. Except that my job is crunching numbers and being a huge nerd, not making things look purty. Fortunately, voiceofsandiego.org’s talented cartoonist Ashley Lewis brought her design skills to bear on the problem and conjured up a sleek new graph look. Thanks, Ashley!
Alright, let’s move on to the data. Home prices finally showed some weakness in November, as we discussed in the last entry. What about sales? Well, they were down from the prior month by 12 percent.
That sounds like a lot, but sales declines are typical between October and November. This drop is only slightly higher than the average October-to-November decline over the past five years of 10 percent. The accompanying graph — on which you can click to get a bigger version –shows that this November’s sales decline was smaller than in 2008, though larger than in 2007 (which posted the only November gain in my five years of data).
The number of sales was 11 percent higher than in November 2008. So I would say that sales volume was on par with recent months, considering seasonality.
On the supply front, inventory was down by a couple percent for the month and down 23 percent from last November. Shadow inventory is still a no-show and the supply of homes for sale remains tight in comparison to demand.
So why did the home price winning streak come to an end? There are a few potential explanations. The seasonal weakness in demand may by itself have been enough to stop propelling prices upward against the negative prevailing economic backdrop. We could also be seeing a situation wherein people are buying homes but only if sellers cave in on prices, resulting in decent volume but weak pricing power. (This may be happening specifically with the highest priced one-third of homes sold in the county, which the Case-Shiller index shows were already weakening as of a couple months back).
And there’s always this disclaimer: it’s just one month in a data series that moves around a lot, so it could just be noise. Only future months’ data can tell us if this is a new price trend.
— RICH TOSCANO