by Calculated Risk on 7/12/2006 04:58:00 PM

UPDATE: Also see VoiceofSanDiego: First Yearly Home Price Drop in a Decade. Excerpts:

Chris Thornberg a senior economist at the University of California, Los Angeles Anderson Forecast, said dropping home prices can have a powerful psychological effect on homeowners.

"When your house keeps appreciating by 10 or 20 percent a year, easier to buy that nicer bottle of wine, perhaps go out to that slightly fancier restaurant -- what the hell, right?" Thornberg said. "But when that goes flat, suddenly, oh geez, the house isn't going to be this big boom of new wealth. Boy, I'm going to have to be a bit more careful with my dollar."

The San Diego Union-Tribune reports: County housing market continues to soften

San Diego County's housing market continued to lose steam in June, with median home prices posting their first year-over-year decline in a decade and sales dropping for the 24th straight month.
...
Last month's median home price dropped to $488,000, a 1 percent decline from a year earlier and a 6 percent decrease from last November's peak of $518,000.

There it is: a year-over-year price decline in San Diego. Also sales are down and inventory up.

... sales increased slightly from May but were down 24 percent from June of 2005.

Yet another indicator of the county's flattening market is the growing supply of homes for sale. As of Wednesday, there are 22,460 homes on the market, according to Sandicor, the multiple listing service subscribed to by area real estate offices.

They didn't mention how many homes were on the market in June 2005. The article has many positive comments, "a good time for the buyer to jump into the market" and "this is just part of a plateauing of prices", but I think the numbers tell the real story.