The following chart is from “TC” who has been monitoring California Association of Realtors (C.A.R.) and DQNews data. C.A.R. data contains resale single family residences and new homes. DQNews data contains resale single family residences and new homes.
click on chart for sharper image
The speed and depth of this decline in CA housing amazing! Even for a housing bear like myself, I’m astonished each month. While I fully expected nominal price declines at the 40% level (check my old site TheBubbleBuster.com for details), I thought the nominal price decline would play out over a matter of a 1/2 decade followed by another 1/2 decade of stagnant prices leading to a real price decline around 60%.
Instead median nominal prices in CA are now down 47% according to CAR and 42% according to DQNews – and those declines are in less than 18 months! Additionally, these are September 2008 closings, which indicate that these homes were sold in July/August 2008. By the time October sales (December closings) numbers come through we will likely be down more than 50% nominally and 60% in real prices – in LESS than 2 years. Amazing!
Lastly, it is now easy to see that the CA home price decline is hitting all neighborhoods – even the wealthy. In fact, the price declines in many of these areas are now becoming some of the steepest and are all the shortest duration. Monterey is a perfect example of where price declines have only been reported for 13 months, yet percentage declines are around 60% or $500k!
Remember that Case-Shiller is a more accurate way of looking at home prices than median prices. I will have a post from TC on Case-Shiller soon. Thanks TC!
Mike “Mish” Shedlock
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