The Morning Report
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After a sharp March increase, resale San Diego County home prices backed off in April.

For the month, the median price per square foot fell by 1.0 percent for single family homes, 1.1 percent for condos, and 1.1 percent in aggregate.  The accompanying graph shows the while they are down from April, home prices by this measure are still higher than any other month since September 2008.

Why the dip?  It could be noise, but there’s another potential explanation as well.  As many readers have doubtless read elsewhere, we are in a brief period in which Californians can get two home buyer tax credits: the Federal credit, and the new California credit.  (Why a state with serial budget crises is spending $100 million to render its housing supply less affordable is a topic for another time).  The Federal credit is good through June, but the California credit didn’t start up until May.  So in order to double-dip, buyers need to close in May or June.

The idea I’m working toward is that some buyers might have wished to wait until May to close their sales, rendering April a weak month for closings.  And we will see in the next update that sales activity did indeed decline from the prior month.  This lack of demand to buy in the month of April might have exerted some downward pressure on prices. 

If this is what’s going on, then we should see a surge in sales activity and potentially prices in May.  Only the May data will tell us for sure.  In the meantime, I’m giving the spring rally the benefit of the doubt.

— RICH TOSCANO

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