Over the last 12 years, Coronado (defined for the purpose of this analysis as all attached and detached residential properties listed with the San Diego Multiple Listing Service for the 92118 zip code) has seen its inventory (or the daily average number of properties listed for sale) fluctuate.The ratio of ‘Inventory/Sales’ has gone from a historical trend of 6 to now 17 (with some sharp periodic upward spikes over the last 2 years). Essentially, what this means is that historically for every house sold 6 were for sale. Over the last 2 years, that number has averaged 17 and climbing, nearly a 200% increase.

Compounding the additional supply has been a reduction in demand (or the number of properties sold). Over this same 12-year period, monthly sales have typically fluctuated between 60 and 80 properties. However, over the last 2 years, monthly sales have dropped to between 40 and 60 properties. This divergence of demand and supply exasperates the over-supply condition. Neither variable means much alone. They must be analyzed in respect to the other. If inventory rises proportionally to the rise in sales, values are supported. It is when one or both of these variables become dislocated from the other that values are susceptible to change.