A 20.6% decline in the rate of sales between July and August 2009 for Single Family Detached Homes in San Diego is about as sharp a decline as we may ever see. As one measure of the health of our housing industry, what does this information tell us?
We can see that a July to August decline is fairly typical, but this drop is extreme.
From some other stats, our total months of inventory is 2.8 months, but only 1.5 months up to $500,000.
At this point, I would offer that the decline is sales is linked more with the low inventory than anything else. The low inventory is tied most tightly with the foreclosure moratoriums (which are due to expire in a few days).
Knowing how many offers are occuring on nearly every home placed on the market, I believe if we have a reasonable release of foreclosures (say no more than 5,000 - to bring us to 4.5 months inventory) we will have swelling sales this fall / winter. (I believe also that I make that statement without Pollyanna's rose-colored glasses.)