Thanks to Rich Toscano for the excellent work at the voiceofsandiego.org:
The Case-Shiller index of San Diego home prices declined in September. For the month, the low-priced tier dropped 1.6 percent, the middle tier 1.1 percent, and the high tier .1 percent. The aggregate index fell by .8 percent.
September is typically a weak month for home prices. When that negative seasonal influence is backed out, the decline was less severe (in fact, the high tier actually rose). Still, though, the direction of the market has been pretty steadily downward since the tax credit stimulus ceased to be back in mid-2010:
Returning to the non-seasonally-adjusted numbers, here’s a look at the Case-Shiller index numbers since the bubble-era highs. Since the peak, aggregate home prices have fallen by 39 percent:
The last graph doesn’t account for the ever-declining purchasing power of the dollar. This is an important distinction, because inflation helps to mask the magnitude of the actual decline in home values. The next graph shows Case-Shiller prices since the peak again, but this time they’ve been adjusted for inflation:
Since the peak, “real” (inflation-adjusted) home prices by this measure have fallen by 47 percent. It’s tough to see on the graph, but this is slightly lower than the previous trough in early 2009. Real San Diego home prices have just hit a new post-bubble low.
Just wait for February and March numbers!
It will be interesting to see how strong the spring bounce is in 2012. There wasn’t much of one in 2011 and with the political climate there’s really no hope for any major housing stimulus until 2013. It really wouldn’t be surprising to see rates stay low and housing prices to drift somewhat lower with small bounces along the way. It’s what happened in Japan’s bubble.
The data should be viewed with a longer term to view how far off current prices compare to their natural price progression. If the data is looked at since 1991 for example, you’ll see that we can expect at least another 10-15% price decline before we’re at more normal levels. Usually however, we may see an over-correction, so my prediction is another a further loss of 20% by the end of 2014, which should be close to the bottom of the market if the shadow inventory does not cause havok on prices.
“If the data is looked at since 1991 for example, you’ll see that we can expect at least another 10-15% price decline before we’re at more normal levels. ”
Personally, I would like to see that data. If you factor in interest rates and inflation, houses are cheaper now than they were in 1991.
Come on baby keep coming down so those of us making 200k a year can actually afford a 3 bd 2 bath 1800 sq ft house!!!!
I check regularly prices in Del Mar area and see no 30 or 40% decline. Prices are at or near peak.
I have lost hope of prices ever coming down in Del mar :-(((