The Case-Shiller index of San Diego home prices declined once again in January, falling by 1.6 percent for the high-priced tier, 1.0 percent for the mid-priced tier, and .2 percent for the low-priced tier.  (The tiers represent, respectively, the top, middle, and bottom one-third of homes sold by price).  The overall San Diego index fell by 1.1 percent.

As the following graph shows that the middle and high tiers are now below the post-bubble low points they hit in early 2009.  (I guess that means I should remove the word “2009 trough” from these graphs).

 

The winter months are usually weak for pricing, so the seasonally-adjusted indexes fared a bit better.  They were down .4 percent for the high tier, .6 percent for the medium tier, .2 percent for the low tier, and .3 percent in aggregate.  So, prices were down (though just barely) even when seasonality is accounted for.

The seasonally-adjusted mid-priced and high-priced indexes are also now at new post-bubble lows:

 

Here’s a look since the bubble topped out.  In aggregate, San Diego prices are down 40.6 percent from the peak.

 

The price decline is worse when we account for the fact that a dollar today is worth less than a dollar was at the peak in November 2005.  In real (inflation-adjusted) terms, San Diego prices have almost been cut in half, down 48.5 percent.

 

For a long-term view, here is a look at the entire history of the Case-Shiller tiered indexes, also adjusted for inflation:

 

Rich Toscano is a financial advisor with Pacific Capital Associates*.  He can be contacted at rtoscano@pcasd.com.

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    Written by Rich Toscano

    Rich Toscano is a San Diego financial advisor who has been writing for Voice of San Diego since 2006. He maintains his own San Diego housing blog at piggington.com.

    8 comments
    Steve Jay
    Steve Jay subscriber

    Until this downward spiral levels out and slowing trends upward and housing demand and home building increases, our local economy will continue to suffer across all sectors. Today too much of a typical family HH income is spent on housing thus choking off discretionary spending resulting in much lower tax revenue. But hey, I get to spend every weekend in San Diego!!

    SDnatiV
    SDnatiV

    Until this downward spiral levels out and slowing trends upward and housing demand and home building increases, our local economy will continue to suffer across all sectors. Today too much of a typical family HH income is spent on housing thus choking off discretionary spending resulting in much lower tax revenue. But hey, I get to spend every weekend in San Diego!!

    Rich Toscano
    Rich Toscano author

    David - No, I don't have inventory broken down by tiers. There is definitely a lag time, especially with the Shiller data. The CS data is lagged by a couple months, so the above data is from January, and is based on three months trailing sales, reflecting closings that took place in Nov-Jan and prices that were agreed upon a month or two before that. Whereas the inventory article you are referring to looked at February inventory. So if my thesis of a short term price bounce is to be correct, we probably won't see it until roughly the March Shiller data, which won't be released until May.

    richtoscano
    richtoscano

    David - No, I don't have inventory broken down by tiers. There is definitely a lag time, especially with the Shiller data. The CS data is lagged by a couple months, so the above data is from January, and is based on three months trailing sales, reflecting closings that took place in Nov-Jan and prices that were agreed upon a month or two before that. Whereas the inventory article you are referring to looked at February inventory. So if my thesis of a short term price bounce is to be correct, we probably won't see it until roughly the March Shiller data, which won't be released until May.

    Irvin krick
    Irvin krick subscriber

    I'm sure home prices will go even lower the the bubble is not over yet, even observing houses for $400,000 to $800,000+. People are still in debt and creating more debt every day. Plus the wages have not kept up with the infaltion, (or as the government declared last year, quote: "there is no inflation".)

    Irv
    Irv

    I'm sure home prices will go even lower the the bubble is not over yet, even observing houses for $400,000 to $800,000+. People are still in debt and creating more debt every day. Plus the wages have not kept up with the infaltion, (or as the government declared last year, quote: "there is no inflation".)


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