John has an in-depth article out on home-price appreciation, and he’s no ivory-tower guy – his staff is on the street daily:
Rolling it all up, we are projecting 4% price appreciation for the country next year, with wild variations by market, huge vulnerability to changing mortgage rates, and a wide variety in risk levels (San Francisco looks to be in a mini bubble, but bubbles can go on for quite some time, while Atlanta looks to be very underpriced).
He mentioned that the best measure of pricing trends is the “number of months of supply of homes”. He didn’t say what he considers ‘normal’, and not sure we’ll ever have that again anyway! But it used to be that six months of supply was considered balanced.
Here are the current active listings of detached homes, divided by August closed sales:
NSDCC: 1,100/244 = 4.51 months.
SD County: 5,814/1,885 = 3.08 months.
I’m not sure how much you can read into this statistic though, because 867 (79%) of the NSDCC homes for sale are priced over $1,000,000, and only 1,086 sales have closed over $1,000,000 this year. If we divide the 1,086 by 8.5 = 128 per month, which means there is an approximate 6.8-month supply of million-dollar homes for sale currently.
But following this stat over time would identify the trend. I’ve added a new category so we can track it from now on!