Recent Numbers for the S&P 500’s Case-Shiller Index reveal a sharp decrease in home prices for San Diego: low-end, mid-range, and top-tier valued homes have all seen sale prices drop dramatically since their peak on the index in November of 2005. The San Diego Tribune finds the Case-Shiller Index contrasts to what some see as a bottoming out and stabilization of prices in the area. But San Diego State University lecturer Mark Goldman says other indicators—unemployment rates, income levels, and business closures—are all far more prophetic of a true bottom.
ft take: The Case-Shiller Index moves away from the “phantom-figure” of median home sale prices and toward a more comprehensive indicator of real estate market health. Home sales agents need to expand the thought process to include three-tiered price reporting instead of blanketing this core data as pessimistic or worse. Ignoring the separate tiers of low-, mid- and high-range home prices in favor of the median home price figure is shortsighted. While lumping all price ranges together is appealing, it is also simplistic and allows current market values to be disproportionately distorted downward as the anchor of foreclosed homes and their bargain-basement pricing creates a false appearance of a shared degree of loss for all homeowners. That simply is not, and has never been, the case as the three-tiered home value structure demonstrates: In San Diego, the Case-Shiller reveals low-end home sale prices have plummeted by 49.5% whereas high-value home prices have gone down by less, at 32.6%. Someday the mathematical abstraction of the median price (or any median in real estate activity) will become relegated to the trash bin of History’s good examples of lazy and uninquisitive ideas. The foreclosures resulting from the binge of mortgage originations on low-tier properties to the tenant-type wage earner has shown the median price to be a corrupt influence used against the public for those releasing that number—no appraisal or BPO is ever based on the median price since a “median property” does not exist as a comparable to conduct an income analysis or workup a cost of replacement valuation.
Re: “Housing market still 6th-most distressed,” by San Diego Tribune