Today’s quotes on the Case-Shiller Index report:
National home prices fell 4.1% during the last three months of 2010, compared with 12 months earlier, according to the latest report from the S&P/Case-Shiller home price index, a closely watched indicator of market trends. They were down 1.9% compared with three months earlier. The decline was widespread, with 18 of the 20 large cities covered in a separate S&P/Case-Shiller index recording losses for the year. The only gains were posted by Washington, which was up 4.1%, and San Diego, which saw prices climb 1.7%.
“Despite improvements in the overall economy, housing continues to drift lower and weaker,” said David Blitzer, spokesman for S&P.
“We’re really close to being at the bottom again,” said S&P’s Maureen Maitland. “Last years’s gains came courtesy of the tax incentives and the market is not holding up on its own.”
“I think the price may go down substantially,” Robert Shiller, Yale University professor of economics who helps formulate the study, said on CNBC.
“The more accurate picture might be that we got down to the bottom in mid-2009 and we stopped there and we’re still there,” Blitzer said in a CNBC interview. “Maybe we’ll still be there for quite some time.”
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It seems like pricing has been flat around here, so the +1.7% number for San Diego over the last 12 months sounds about right – though how they compute the index is still suspect. They compared the fourth quarters too; the seasonally-adjusted change between 4Q09 and 4Q10 was 0.0%.
Here’s are the MLS detached home sales for the latest fourth quarters, and first eighths:
San Diego County, Fourth Quarter
| Year | # of Sales | $-per-sf | %REO/SS |
| 2009 | 5,841 | $243 | 40% |
| 2010 | 4,965 | $243 | 37% |
San Diego County, Jan 1 to Feb 15
| Year | # of Sales | $-per-sf | %REOSS |
| 2010 | 1,884 | $234 | 44% |
| 2011 | 1,818 | $234 | 45% |
North SD County Coastal, Fourth Quarter
| Year | # of Sales | $-per-sf | %REO/SS |
| 2009 | $408 | 17% | |
| 2010 | $381 | 18% |
North SD County Coastal, Jan 1 to Feb 15
| Year | # of Sales | $-per-sf | %REOSS |
| 2010 | $378 | 22% | |
| 2011 | $378 | 24% |
So far this year, there have been 10% more sellers around North SD County Coastal who have been willing to sell for what the market will bear. Those buyers have been willing to pay about the same, on average, as in the beginning of 2010.
We haven’t hit “the bottom” until all the false price supports have been removed and we see what American families can really afford to pay for housing.
For something to sell there must be a willing buyer with money to spend.
Interest rates are going up as well. Could put more downward pressure on the market.
I would not be surprised very slow downward movement – another 5-10% drop — over the next 18 months.
At that point I think we will be at the true bottom.
Of course, 10% is not much, so probably OK to buy now if you need a house.
Looks like 10% more willing buyers so far this year Art, without a big price dump.
“We haven’t hit “the bottom” until all the false price supports have been removed and we see what American families can really afford to pay for housing.”
I think you need to define “all” the supports that “have been removed”. 8K credit? OK, sure. Mortgage interest deduction? Gonna wait that one out?
I think you also need a timeline where you are willing to say F it, and go ahead, even with supports. For example, govt has been supporting milk prices continuously since 1933. Moreover, even if all supports were suddenly removed today, somehow, I doubt that milk would fall all the way back to 1933 nominal prices…
I’m begging for interest rates to go up. It’s time those actually in posession of $$$ have a chance to flex their muscle. I’m tired of the near-nothing-downs bidding up prices.
And while we’re at it. Evict the free rent Deabeats. Let’s get people that actually pay their mortgages back in houses.
The boomers who refinanced (not a small group) in the 2000 to 2007 window are going to come up against decreased wages as they retire/get laid off, etc. and their inability to unload their underwater homes ( a lot of boomers bought late in life and still have those mortgages).
Nationally for years to come we’re going to see an increase in foreclosures and continued downward pressure on home prices, except in select locations (scenic places).
Back during the Great Depression, it took 24 years for housing prices to return to the highs of the late 1920s.
I’m sticking with 7% increase for 2011 in San Diego County.
List prices are heading up and market mix will alone bring the median price higher.
Add to that a strengthening economy, more hiring, and a dearth of new home construction.
Population increased again this year. There is hardly any new construction. There is hardly any land available to build. Anybody seen any new apartments being built? Demand is going to tighten and supply is going to be eatin up. I just rented one of my houses out last month and got $300 more per month then expected. People are still calling me to rent. So in my direct experience (not some blogger from Idaho) as a landlord in San Diego, I see things strong. I don’t give a rats ass about appreciation – just cash flow.
I have been a long time bear ….and a long time reader of this blog … looking for my Dream Home in South Carlsbad. Offlately I am seeing more and more evidence that Dream properties in North County Costal for a Million or less will always be in demand … This is very much in line with what Jim is suggesting (also to some extent what Mozart keeps on buzzing). Its a small inventory with lots of capable buyers in this price range. Its very difficult (almost impossible) to have those Ocean View Properties in Aviara for under a Million … Those were selling for around 600k in 1998-1999. There is lots of other “less desirable” inventory around and those are getting some price discounts.
🙂 I was picking on all those “bottom” callers. The bottom is subjective. I think the people who are going to survive this economic debacle intact are ready to buy, even if they are going to overpay slightly.
I’m guessing that the gap between those who are still comfortable and employed (and expect to be for some time) and those have been booted unceremoniously out of the middle class is going to grow.
IMHO, there has never been a more important time to choose WHERE you buy.
Assume you can’t move up for a long time. 10 years, at least.
That changes your perspective on what is a good choice for you and what isn’t. That’s why the premium properties in the good school districts are so much in demand. Your buyers today are figuring they need to park where they can stay for a good long while in a community that is going to meet their needs for a significant period of time.
That’s worth being picky about when you are looking that far out.
Maybe not wait out the mortgage deduction going away (which it should) but how about waiting for when the US is not 95% or more of the mortgage market. I bet you that will happen faster. And I’m not sure what your milk example has to do with anything or how much it’s supported, but how leveraged is your milk purchase? How many loans are taken out to buy it (well, none anymore…)