Friday, August 11, 2006

More on SoCal Housing

by Calculated Risk on 8/11/2006 11:15:00 PM

The following graphs are based on pricing and transaction data from DataQuick.

Click on graph for larger image.

The first graph shows the monthly median home prices for Los Angeles, San Diego and Orange County since 2002.

Prices in San Diego started lagging the other markets in 2005 - prices peaked in November 2005, and prices are now falling. For San Diego, the July 2006 median home price is 6% below the peak of last November.

Median prices for both Los Angeles and Orange County are currently at, or just below, their respective peaks.

The second graph shows the year-on-year change in the median price for the three markets. YoY price appreciation is falling for all three markets.

There was one last surge in 2005 for LA and OC.

The third graph shows the YoY change in the number of transactions. For LA and OC, there was a final surge in activity that corresponds to the price action (previous graph).

For San Diego, YoY activity has been falling for 25 consecutive months.

My guess is San Diego is a few months ahead of LA and OC in the current down cycle, and that LA and OC prices will peak in the next few months - if they haven't already peaked.

NOTE: I compared the DataQuick numbers to the OFHEO House Price Index for the three markets (Los Angeles-Long Beach-Glendale, San Diego-Carlsbad-San Marcos, Santa Ana-Anaheim-Irvine). The appreciation since 2002 is very close using both data sets. When the OFHEO data series for Q2 is released in September, I expect San Diego's YoY appreciation to be close to zero and the quarterly prices to decline about 3%.