For the month of February, the report on prices for resale homes in the San Diego area was a bit mixed. Prices per square foot on single family homes was up by 2%, yet on condominiums it was down 4%. When the price per square foot on single family homes and condominiums are combined, prices per square foot for the month of February showed almost no change, increasing by 0.3% and the number of homes that were closed on showed no significant change as well. This is quite rare for February, when the number of home sales usually decreases. Pending sales, however, increased to a record level for the month of February.

While home prices seemed to flip-flop, the number of homes in inventory decreased to 20% less than the year before. This is also rare for the month of February. The number of homes for sales is smaller than some may think due to the number of contingent properties growing. Contingent properties are typically foreclosures or short sales that are awaiting approval by their lenders. These contingent properties are counted in the number of homes in inventory, which can be misleading. Homes that are actually available to buyers, known as active inventory, have decreased by 33% from last year.

Another statistic that is decreasing is the number of months worth of total inventory, which dropped to almost 4 months. This statistic is very important because it directly correlates to changes in home prices. The lower the number of months in inventory, the higher home prices usually are. There have only been two times in the past where these numbers didn’t correlate, back in 2009 and again in 2011. Although inventory levels tell us nothing about housing in the future, currently inventory is tightening and one can expect that the price of homes in the San Diego area will be increasing in the near future.