San Diego Housing Bubble News and Analysis

Below, please find a few tidbits to aid in any weekend procrastination you might be planning.

First, I'll be on KOGO (that would be the radio, AM 600) on Sunday at noon chatting with my buddy Scott Lewis, editor of voiceofsandiego.org, about housing and ye olde inflation/deflation debate. I know what we'll be talking about because we already recorded the segment, which was about 20 minutes long.

So tune in to hear the part where I know I have another a point to make, but I totally forget what it was, resulting some nice dead air. Smooooth.

The show should be archived here at some point.

Second, Jon Lansner of the OC Register is celebrating the 3-year anniversary of his housing blog by interviewing other housing bubble chroniclers. I'm up today.

Condos were whacked hardest again last month, at least as measured by the size-adjusted median price. That price indicator was down 6.4% for condos between January and February alone. The detached home size-adjusted median was down 3.0%, with a volume-weighted aggregate of the two down 3.8%.

Below are a few quick graphs of the December numbers... I will note that for the second month in a row, the high tier fell most on a month-to-month basis (-2.4%).

I should also note that the tier cutoffs keep getting lower -- moreso than would be accounted for by just price declines -- because most of the activity is concentrated in lower-priced properties. (The cutoffs, you may recall, are arrived at by separating all the home sales into thirds by price, so the tiers will drop as more low-priced stuff sells).

Anyway, here's a chart from the peak:

A while back, just for giggles, I put a little Redfin price per square foot widget up near the lower right of the Econo-Almanac. Lately I've noticed an interesting pattern... that asking prices have turned up noticably even as selling prices continue to nosedive:

The new year began with another step down in the size-adjusted median for both property types:

The size-adjusted median price was down again last month for both property types, with a decline of 2.6% for single family homes and 7.8% for condos. The condo median price per square foot has now fallen over 50% from the September 2005 peak, forcing me to extend the Y axis downward in the chart below:

The size-adjusted condo median rebounded a bit from October's freefall, but this month it was single family homes' turn to get whacked. The single family median price per square foot was down a gruesome 6.1% between October and November:

The following is a typically cheery email sent by FOP (Friend Of Piggington), occasional guest poster, dim sum comrade at arms, and foreclosure guru Ramsey Su. Ramsey's previous guest commentary can be found by poking around here.

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If you only have time to look at one set of data to figure out the status of the real estate market, there is no doubt that I would choose the monthly Hope Now reports.

Unfortunately, this is the official press release which grossly distorts the valuable data and timely data Hope Now collects: http://www.hopenow.com/upload/press_rele...

The meat is here: http://www.hopenow.com/upload/data/files...

Here is an example of how valuable this data is. I call this the PUF indicator – PENT UP FORECLOSURES.

Over at voiceofsandiego.org I put up an article about the October employment figures with the typical chart plus a comparison with the 1990s recession. For the chart-happy, additional charts can be found below.

This one is the same as the chart at Voice except in percent terms instead of job terms.

October saw an epic drop in the median price per square foot paid for condos, down 14.8% in a single month:

Here, without much in the way of exposition, are some charts of the San Diego Case-Shiller data for August. The first three charts display nominal prices; the latter three display prices adjusted for inflation as measured by the CPI.

Based on the latest month's closed home sales, my simplistic but thus far pretty effective Case-Shiller HPI model forecasts a September decline of 3.0% for the HPI:

Watching Paulson and Bernanke flail around has been a bit time consuming this month. While it's still September, let's get to the rodeo.

I'll start with the Case-Shiller HPI model based on the size-adjusted median:

Well, I called my assorted leaders to register my abject displeasure with the bailout. To keep things short I just noted two opinions:

1. It's ridiculous that we are using taxpayer money to pay above market prices for possibly worthless assets and that the proceeds are going to highly paid people who knowingly took huge risks.
2. I hope there is going to be some sort of accountability among all the regulators who first denied the risks and are now throwing our money at fixing their aftermath. If all the same people stay in charge, this kind of stuff will just keep happening.

I don't know how much good it does to make these calls but since a lot of people are apparently up in arms about the bailout it's worth a shot.

Here are the numbers I called:

White House: (202) 456-1111
Senator Feinstein: (202) 224-3841
Senator Boxer: (202) 224-3553
Congresswoman Davis (I'm in 92103): (202) 225-2040

Longtime piggs will recognize the name of one Ramsey Su, a former REO broker who enjoys lengthy excursions into the data rathole. Ramsey has kindly agreed to let me post his latest analysis here (this includes the original piece followed by a clarification/update).

If you like this one, click here for Ramsey's previous postings. This one in particular, written back in February 2007, was particularly prescient and remains one of the most widely visited articles in Piggington history.

PS -- Yes, it's supposed to be "illusive" as in "illusory," as opposed to "elusive." And yes, I had to look up "illusive."