St. Paul Broker and blogger Teresa Boardman has always said that “Fridays are for fun!” Well, what’s more fun than dusting of the Altos Research market trend charts for San Diego to kick off our rainy weekend? (If you answered, “Out-patient surgery,” then you are correct, but you didn’t recognize my question as a being rhetorical.)
So, here we go.
The charts below show the 90-day rolling average median price trends and the Market Action Indexes for San Diego and for three sample I-15 Corridor communities (Scripps Ranch, Rancho Penasquitos and Mira Mesa). A few thoughts before we forge ahead:
- The median price trends are for listings; these are the prices that sellers are currently asking. In the case of Value Range pricing, which is so often the case in our San Diego market, the high-end of the range is used. As the market has continued to decline, more sellers and their agents are abandoning value range pricing in favor of a fixed “offered at” price, recognizing that buyers in this market tend to ignore all but the low number. Therefore, the declines in seller pricing you see in the charts are likely overstated.
- Altos describes the The Market Action Index as follows: “The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory.
An MAI value greater than 30 typically indicates a “Seller’s Market” (a.k.a. “Hot Market”) because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a “Buyer’s Market” (a.k.a. “Cold Market”) where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.” Okay, I don’t exactly get it either, and their formula remains a secret, but it usually feels about right.
- These numbers are for single-family detached homes, and do not include activity in the condo market.
Here is a quick snap-shot of what our local MLS says about inventory versus homes currently in escrow:
Without thinking too hard (it is Friday, after all, the charts suggest that sellers are finally adjusting their pricing to the current market, or at least are starting to respond in the right direction. As far as supply versus demand, the charts also suggest that we are flat-lining, but keep in mind that we would have expected to see some upward trending in the Market Action graphs had the traditional seasonal factors been at play. Adjusting for this, it looks like the lines are still forming uphill and to the rear.
What fun that was! Have a great weekend.