March 2023 Erdmann Housing Tracker Update

The return of the California YIMBY Miracle?

Don’t call it a comeback!

I speculated last fall that price trends in California suggested that expectations of YIMBY gains could already be having an effect. Then, come January, Zillow implemented a methodological change in their price estimates, and the YIMBY miracle disappeared.

I’m not sure exactly how the methodology changed the way Zillow picks up these shifts. It actually appears to have made my Cyclical vs. Supply components more in line with observer’s intuition about trends back before 2008. But, concerning recent supply shifts, the question is: Was there a striking coincidence that Zillow estimates before their change mistakenly tracked price trends that just happened to coincide with California YIMBY wins? Or, are there truly trends in California home prices that reflect loosening supply conditions, which are a bit harder to see with the new methodology but will eventually emerge from the noise anyway? It could be that we should consider the latter more likely.

Was the former a wicked coincidence, was it pushed a bit by my observer’s bias, or was it true and the new methodology will eventually confirm it? Three months into the new data, the very tentative answer to that question may be that there is a California YIMBY miracle, after all.

Data and more below the fold.