Case-Shiller: San Diego Home Price Drops Slow Ever So Slightly

It’s time once again for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI).

For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – December data is released in February).

Here are the basic Case-Shiller stats for San Diego County as of December:

December 2008
Month to Month: Down 2.1%
Year to Year: Down 24.8%
Change from Peak: Down 39.2% in 37 months

Last month I questioned whether a slight slowdown in the rate of year-to-year price drops may be the first sign that home prices are on their way to stabilizing in San Diego. Of course, a single month of data is not enough to come to any real conclusions, but it was interesting, nonetheless.

This month, the year-to-year data in San Diego and Los Angeles ticked up again. Here’s a chart to demonstrate what I’m talking about:

Now, I’m not saying that two months of data is enough to proclaim the imminent demise of the housing bust, but it does at least show us that November’s data was not merely a one-month anomaly. This is definitely something we will be keeping our eyes on in the coming months.

The following chart shows the San Diego HPI scaled such that the November 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Diego HPI was at or lower than it was in the latest data (October 2002).

According to the Case-Shiller index, as of December home prices in San Diego have “rewound” over six years.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare San Diego’s performance to other areas across the country:

And here’s our final chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

San Diego has experienced one of the longest and deepest home price busts of any of the cities tracked by Case-Shiller, so it would make sense for San Diego to be one of the first to find the actual bottom. I still thing we’ve got a ways to go yet, but if the pattern of moderating year-to-year declines continues, we may at least know where to look.

February City/Neighborhood Price Reductions

Let’s take our monthly look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 38 cities/towns we ranked in San Diego County this month, 22 (28%) had price-reduced ratios of fifty percent or more. Lake San Marcos, Coronado, and Valley Center continued to hold the top three spots from last month’s top ten to this month.

Getting a little more granular, let’s look at the top ten San Diego County neighborhoods for price reductions:

Of the 93 neighborhoods we ranked in San Diego County this month, 34 (37%) had a price-reduced ratio of fifty percent or more. Only Egger Highlands and Mountain View carried over in the top ten from last month.

There is definitely some consistency in the number of homes seeing price reductions month to month in the cities and neighborhoods around San Diego County. If finding a good deal on a home is important to you, these neighborhoods might be a good place to start, as higher ratios of reduced-price homes indicate sellers that need to sell and are willing to lower the price to do so.

Biggest Discounts February Update

Let’s have an update on where buyers are currently getting the biggest discount off the asking price. Our goal in sharing this data is to help potential buyers to know which neighborhoods are softer in terms of sale price discounts off list price, to better equip you when making an offer, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from the last two months in Redfin’s San Diego service area and sorted it by community. (Usually we sort by zip code, but this month I was unable to obtain zip code data.) We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any zips with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten communities with the largest overall discount:

The overall discount for the San Diego area went back up to 4.3%, just above where it was in December, indicating either an increase in the willingness of sellers to bargain with buyers, or a decrease in the skill of sellers to set appropriate prices to begin with.

Here are the ten communities with the smallest discounts:

Of the 2,098 sales we tracked in the 3-month period, just 40 homes sold for more than 20% off the asking price, while 647 homes sold for more than asking.

As a whole, the trend in San Diego is currently moving back toward larger discounts for most neighborhoods.