Home sales may have recovered strongly from the depths they plumbed in 2007 and 2008, but they are still anemic when compared to San Diego sales activity over the past couple of decades.
You wouldn’t know it from looking at a chart of historical home sales. The number of sales, indicated by the blue line in the following graph, has recently vaulted up to the upper part of the historical range:
But it’s not quite that simple. (Is it ever?)
The most recent month charted was July, which is typically one of the fastest-paced months for sales. And the spikes up and down in the chart make it pretty clear that seasonal swings in sales activity are pretty huge. So the most recent data point should be compared not to the overall range of the blue line’s ups and downs, but rather to the vicinity of the line’s annual peaks.
Another way to account for the seasonal changes is to use an average of the past twelve months’ sales. Since this moving average will always include all twelve calendar months, seasonal effects have no impact. The twelve-month average is indicated by the orange line in the above chart.
Even the moving average appears to be fairly robust compared to the past range of sales. But there’s another issue to consider. Since 1990, when my data set begins, a lot of people have moved to or been born in San Diego. So to really do a fair comparison of current and past sales, it is necessary to adjust the figures for San Diego’s population. I have done so in the next chart by increasing prior sales in proportion to the subsequent increase in the San Diego labor force (used as a proxy for population because, unlike population data itself, labor force stats are available on a monthly basis like the sales data).