patrick.net

http://www.mercurynews.com/breakingnews/ci_5910126

"But in those expensive counties, there's a catch to understanding the increase in median prices: The mix of homes that are selling has changed. Considerably fewer homes than normal are selling in the least expensive neighborhoods. With those out of the mix, the median price rises. Some homes in some neighborhoods are gaining in value, certainly - but this spring, "market mix" is also a factor clearly influencing the increase in median prices."

Also, the trend for asking prices is decidedly down while the trend of inventory is firmly up.

http://www.housingtracker.net/old_housingtracker/location/California/SanJose/

The only reason the median has increased in the last 3 months is because of a higher proportion of high end sales versus the plummeting of entry level sales. Few entry level sales skews the numbers to a higher median price. Funny how Data Quick never really mentions this.

To DataQuick's credit they explicitly mention this phenomena in yesterday's release for the SoCal numbers. Note that parts of Socal are seeing over a 45% (San Bernadino and Riverside counties) dropoff in sales (which clearly affects the mix). The average drop in sales for SoCal is ~28% while NorCal is ~18% (with the highest drop offs in Solano and Contra Costa).
And as lunarpark points out, some of the news agencies are catching on to the fact that the median is not the whole story.

Dow still soaring. The next Bubble?......

EBGuy,

I'm not out to totally... discredit DQ but doesn't it seem odd that they only reveal certain interpretations of the data when it's all but obvious? Perhaps the "median debate" isn't as hotly contested in the MSM as it is here but there have been those over the last few quarters that have challenged it's value.

DP,

Dow 36,000!

http://tinyurl.com/3dyoc7

I am not a fan of Freud. I like Jung better. Synchronicity all the way!

Or perhaps I make Barnum statements only.

But GC, some may think that you are pushing the limit again.

Have you read Jung’s lecture notes on Also Sprach Zarathustra?

No.

All I did was quoting a scholarly publication by a famous man.

People can still question your motive.

If I were to psychoanalyze you, I would say that you have a subconscious desire for conflicts.

Domination is not much different from conflict.

Won’t you say you learned something new today from Herr Freud?

I learn something new every day. That is the wonder of living.

In tough housing times like this, shouldn’t people be able to afford less expensive homes? Shouldn’t lower end homes be selling quicker?

Absolutely not. The ability for lower-end people to afford housing has been affected. As a result, low-end housing are not transacting.

Is there data to back this up somewhere? For example, the average house square foot should have gone up in the recent year (bigger house = more expensive) if this is true, right?

Not necessarily. Better homes in better locations are more expensive.

You can also take a look at the asking price trend. If the median asking prices is going down while the median sale price is going up, you know the mix is changing.

@James,

Excellent question. We know the median price can be skewed in either direction (up or down) by a greater-than-average number of sales of either very high-end houses or low-end houses. It can also be skewed by lower-than-average sales volume (like we're seeing now), because each individual sale that gets recorded represents a larger fraction of total sales for a given area.

But the real question for us is, do the numbers really support the assumption that mostly high-end houses are selling, and skewing the median higher?

I'm pretty sure the OFHEO quarterly sales report is coming out soon (tomorrow?), and that it --unlike CAR's "median" stat-- mostly relies on same-house sales. In other words, while it's not perfect (excludes condo/townhouse/co-op sales) it is a little better at comparing apples to apples: http://www.ofheo.gov/HPIFAQ.asp

If anyone out there has some good stats/links on what the break-down is for houses that are selling now vs. previous years, please post them.

However, I do not expect prices to have come down significantly already. Core Bay Area is still a Frickin Fortress.

SF "area" also includes Santa Clara, Contra Costa, Solano, etc.

"Yeah, that usually happens when it hits the fan" LOL!

Watch out below, above and to the sides! Aw the hell with it, get coveralls and rubber boots!

Watch out below, above and to the sides! Aw the hell with it, get coveralls and rubber boots!

I would just leave the room.

I’m a little suspicious of www.housingtracker.net’s data. It claims that the current inventory of the SF area is 15639 and the data is taken from MLS listings. But if I go to mlslistings.com and choose the San Francisco, Alameda, and San Mateo counties, I see only 2778 listings available. Am I missing something here?

Feel free to email the guy - I've done it before. He's pretty friendly.

The phenomenon of falling house prices on the outskirts while prices of homes in the prestigious areas are stable has occurred in Sydney, Australia a couple of years ago based on news reports I have seen.

Anyone with more experience of the Australian housing market would care to explain why prices of the more expensive homes in Sydney remained stable.

Gavin,

Sydney is the financial centre of Australia, so the London/Manhattan effect applies (on a smaller scale, of course) to the more expensive houses.

Will someone please delete the pedophiles comments.

Will someone please delete the pedophiles comments.

HARM,

IIRC the Case-Schiller methodology used by S&P to obtain the prices for their traded futures is also based on repeat sales.

I would suggest this might be the most carefully measured/calibrated of all the house price indices, because S&P have a real monetary interest (trading volume) in it being an "honest measure".

Only applies to 10 cities, though.

From CR,

"The Q1 OFHEO HPI will be released on Thursday, May 31st."

ozajh and HARM,

I would tend to agree with all of you about the Case-Schiller and OFHEO indices as being most accurate, especially compared to the NAR and even the Census Bureau data. What I've always wondered about was the relatively small sample size resulting inaccurate representation of the "true" trend.

And BTW, the Case-Schiller index is decidely DOWN for SF.

Yeah, the data is accurate, but OFHEO numbers are based on conforming loans. I think the last time a conforming loan in the BA was written was in the last century.
Contra Costa (where they are making more land) data gets aggregated with SF data (where they are not building any more SFHs) in the San Francisco Case-Shiller Index. Obviously, it must be the sales in the boonies driving the SF Index down. BTW, the 10 city Case-Shiller Composite Index is "predicting" an approximately .5% drop per month for the next 6 months.

SP, prices are not necessarily falling... it's just that the realtor is getting hungry ;-) (fewer number of total sales, less pie to be divided)

GC

You are one sicko. Wasn't it enough when you drove out a bunch of our old regulars with your self-imagined cleverly hidden trolling? I'm not sure if you're a bona fide paedophile or just a jackass trying to stir shit up, but I filtered you out for 6 months before...

Randy,

Just erase and ignore. I don't like these random troll/cry-for-attention comments, but this blog seems to get past them.

Honestly, I can only think of one person that GC sort of drove out and saying more of my opinion on that matter is likely to get me in trouble.

I am following 5 homes in the Danville/Alamo area right now in different price ranges. None of them have sold in the past 2 months. The highest price home has dropped its price by $500,000. (not a typo) and another has dropped its price by $100,000. Inventory seems to be increasing.
Can you say S-L-O-W-D-O-W-N .

Honestly, I can only think of one person that GC sort of drove out and saying more of my opinion on that matter is likely to get me in trouble.

Hmm...

James Says:
I’m a little suspicious of www.housingtracker.net’s data. It claims that the current inventory of the SF area is 15639 and the data is taken from MLS listings.

It is odd that when you find a discrepancy between housingtracker data and your mlslisting search data, it is only housingtracker that you are suspicious of.

SP

[previous reply got cut off by mistake]
The housingtracker site includes condos also in the inventory. Did you include them in your search?

SP

EBGuy said:
prices are not necessarily falling… it’s just that the realtor is getting hungry ;-) (fewer number of total sales, less pie to be divided)

Starving realtwhore or not, I would say prices _are_ falling. It will take a few weeks time for this to be undeniable.

SP

astrid,

Some things are worth standing up to. GC is the epitome of what jeopardizes internet freedom.

He is a coward who fancies himself an intellectual anarchist. If he's capable of disgusting Surfer-X, then he is clearly devoid of redeeming value.

The only reason I haven't moved to ban him thus far is in honoring our policy of being "tolerant" of trolls. That doesn't mean I have to be quiet about his shit, or that I have to allow it on my threads (this is Harm's thread).

DairyQueen

Danville and Alamo are in the Bay Area, California

Things are really slowing in Fremont as well. My wife and I have looked at two places in the past month. One has been dropped from 800 to 760. Listing agent called last Tuesday to say they received an offer and we'd have two days to get our offer in. 8 days later no pending sign posted. The other place listed for 720 has dropped to 700 - listing agent informed us of the drop by voicemail. My wife wondered how he got her phone number when we didn't leave our info at the open house. I informed her that he got it from his cell phone history log when we called to see when the open house would be.

DAiryQUeen Says:
DQ Reports Bay Area Prices up 3.8% YoY in April, 2007 from a year ago. Sorry, no implosion.

Yeah, these days that DQ "report" is sounding about as credible as a letter to the Penthouse Forum.

SP