We know that media types are looking to sell newspapers, and if it bleeds, it leads. The article in the UT this morning about the San Diego Case-Shiller Index starts with this:
San Diego continued to slide down in rankings of the nation’s hottest real estate markets in October.
The article doesn’t mention the lower inventory in 2021, or offer any other explanation. But it does use the D-word, deceleration, in their headline that everyone is using to describe the last few months.
But are home prices really decelerating?
All of the comparisons are judging the year-over-year changes, without any mention of how the 2020 numbers were rising quickly too. If we add the 2020 monthly YoY increases to those from this year, here’s what the combined 2-year increases would look like:
The indices in the last half of 2019 had flatlined, so the graph above is a pretty good visual on how our local index has been marching skyward since the pandemic started.
We can also note that the month-over-month increases are probably a better gauge of current activity – and they have picked up since we had actual deceleration:
Here’s a graph from a different article that also mentioned how price gains are slowing:
If that’s what slowing looks like, I’ll take it!
But let’s not misinterpret the recent index readings and then give potential home buyers the impression that our local market conditions are changing, because they’re not (or at least not yet).
All that matters in 2022 is inventory. Here’s how prices will be affected:
PRICES KEEP MARCHING SKYWARD:
- Ultra-low inventory, or
- Moderate surge of inventory (less than normal though)
PRICE-INCREASES SLOW:
- Big surge of inventory (more inventory than in 2019)
- Ridiculous over-pricing of inventory (it’s a fine line too!)
PRICES FLATLINE OR GO DOWN:
- Massive surge in inventory
- Mortgage rates rise above 4%
We should know by March/April which way it’s going to break!
The tyranny of percentages.
10% last year on one million is $1,100,000.
9.1% this year on $1,100,000 is also +$100,000.
Have lived in CA my entire life 50+ years and 30 in North County. Don’t want to move and no where to go. Please go back to your home state and take your progressive political views with you.
Have lived in CA my whole 53 years, first 32 in NorCal, last 21 in Carlsbad. I want to move west inside the county after my kids finish college 6 yrs from now and I reach 55 for the prop tax advantage. I assume others in same predicament. Engaged observer, wish I had a crystal ball.
@King
Have you seen what’s going on development wise in the Ponto/Leucadia area lately? The crowds and traffic will be insane after the completion of streetscape.
No thanks!
I’m in Carlsbad also but so thankful to be a 15 min ride by ebike to the beach.