San Diego Housing Market News and Analysis
Articles that I have written for VoiceofSanDiego.org, a local news publication that provides continuing coverage of San Diego housing and economic issues.
Submitted by Rich Toscano on May 5, 2009 - 9:12pm
The Compleat Data Rodeo will be up shortly, but in the meantime, I've written a post at voiceofsandiego.org about the fact that the size-adjusted median actually increased last month for the first time since May 2007:
Submitted by Rich Toscano on May 1, 2009 - 9:37am
Back to the topic of local rents and their relationship to incomes, I found some historical data on San Diego's median household income at the Census Bureau website.
The median household income is better than per capita income, which I used in the prior article, because it is a median while per capita income is an average. A median is the middle value in an ordered set of data, and unlike an average it is not thrown off by extreme outlier values (per the "Bill Gates problem," in which Mr. Gates walks into a dive bar and the average net worth of all bar patrons skyrockets into the millions). So the median makes for a better indication of what the typical San Diegan household, and especially the typical San Diegan renter household, earns.
The Census site also had data on the median San Diego rent, which is also good. The downside is that the Census data only goes back to 2001 and is current through 2007. So we don't get the same long-term view as in last week's article, but it's worth taking a look at this alternate set of numbers.
With all that said, here is a chart of the median rent as a percentage of median household income for San Diego:
Submitted by Rich Toscano on April 28, 2009 - 6:37pm
In a somewhat gruesome milestone for the beleaguered San Diego housing market, the low-priced tier of the Case-Shiller home price index has now dropped by more than half since it peaked in June 2006.
Specifically, the low-priced index was 50.4 percent below its peak value as of February, the most recent release of the Case-Shiller index. The mid-priced tier had declined by 39.3 percent and the high-priced tier by 32.6 percent from their respective peaks. The aggregate index had fallen by 41.4 percent.
Submitted by Rich Toscano on April 25, 2009 - 3:49pm
I got a lot of pushback when I wrote last month that San Diego home prices were, on the whole, back in line with their historical relationships with local incomes and rents. One of the more frequent counterpoints was the claim that while home prices might be in line with rents, rents themselves had become unsustainably high.
How to analyze such a question? My first thought was to compare how much rents had changed in comparison to local incomes. An increase in rents that was way out of line with what San Diegans were earning would suggest the rent prices had indeed become distorted by the housing bubble.
But the data I have indicates that this is not the case. The accompanying graph charts average San Diego rent as a percent of income per person. The average percentage over the entire measurement period is illustrated by the orange line.
Submitted by Rich Toscano on April 21, 2009 - 4:58pm
It seems that enough people expressed interest in attending Thursday's economic forum that they had to move to a bigger venue over at the USD campus. So if you were planning on attending, please be sure to check out the updated location info.
Moving on, I wanted to highlight some really interesting analysis recently performed by realtor and fellow panelist Jim Klinge.
I have been writing for some time about the strange mixed signals being sent by housing inventory and foreclosure activity. Housing inventory is at a level that, superficially, would indicate a fairly healthy market. Yet homes are going into foreclosure at a very rapid pace, a fact that leads one to believe that a lot of must-sell inventory could eventually hit the market.
Submitted by Rich Toscano on April 17, 2009 - 11:31am
San Diego unemployment hit 9.3 percent in March. This is the highest level in the three-decade history of the unemployment data series.
The below chart shows unemployment trends now and during the prior two recessions. In addition to the magnitude of unemployment, the abruptness of the rise surpasses anything seen in the last two downturns.
Submitted by Rich Toscano on April 14, 2009 - 5:01pm
(Note: The KPBS These Days appearance is archived here for anyone interested).
The number of San Diego properties entering foreclosure hit an all-time high last month, as illustrated by the blue line in the following graph:
In the month of March, 4,260 homes received default notices, which are nastygrams informing delinquent borrowers that they are in foreclosure.
Submitted by Rich Toscano on April 11, 2009 - 11:47am
Kelly and Will over at voiceofsandiego.org broke the story yesterday on a huge condo scam involving overpaying for condos with loans made to straw buyers.
What's interesting is that this all happened in the midst of the bust in mid-2008, after lending had tightened up. The scammers even paid 20% down -- but the prices were inflated by so much (sometimes more than 100%) that the 20% down was easily recouped.
What's also interesting is that the straw buyers willingly lent their identities to this guy:
This is just an investigation by some journalists -- no law enforcement agencies were involved (yet, anyway). I wonder how much of this kind of stuff has been going on out there?
You can read the whole piece here.
Submitted by Rich Toscano on April 7, 2009 - 10:54am
I will have the complete March rodeo up this week; in the meantime, I have written up (and graphed) the March size-adjusted median price figures at voiceofsandiego.org.
Submitted by Rich Toscano on April 4, 2009 - 10:25am
In reaction to the latest Case-Shiller home price graphs, a few readers have asked how a property worth not much more than $400,000 can be considered a member of the "high-priced tier."
The answer is that there is no considering about it. Each month, the Case-Shiller price tiers are calculated by separating all sold homes into thirds by price. The high-priced tier represents not someone's subjective idea of what comprises a high-priced San Diego home, but rather the most expensive one-third of homes sold during the measurement period.
For January's Case-Shiller index, the cutoff between the top one-third and the middle one-third was $419,143. The cutoff between the middle one-third and lowest-priced one-third of homes sold was about $284,375.
The tier cutoffs, and especially the one between the high- and mid-priced tiers, used to be a lot higher.
Submitted by Rich Toscano on March 31, 2009 - 5:15pm
Kelly Bennett has written several words about today's release of the Case-Shiller index for January, so I'll largely just supplement with a few charts.
Here is a look at the decline from the peak for all three price tiers:
Note that the high-priced tier once again fell hardest last month. Relative weakness in this tier is a fairly new development, as the graph makes clear.
Submitted by Rich Toscano on March 20, 2009 - 3:05pm
February proved to be another brutal month for San Diego's job market, according to the EDD's latest estimates. The region is estimated to have lost 37,900 jobs between February 2008 and February 2009. This is a contraction of 2.9 percent.
Early in the downturn, the losses first showed up in the sectors with the most exposure to the housing bubble: construction, finance, and retail. By now, however, job losses are quite a bit more widespread. This is evident in the following graph, which shows the year-over-year change in employment for the three most bubble-exposed sectors, the remainder of the economy, and all sectors in total:
Submitted by Rich Toscano on March 18, 2009 - 3:46am
A record number of San Diego mortgages went into default last month. 3,705 homes entered this initial stage of foreclosure, surpassing the previous high of 3,601 default notices delivered in April 2008.
Trustee sale notices, which occur later in the foreclosure process, remained well below their records, but since they lag default notices it is reasonable to expect that they will rise soon as well.
The following graph shows that the default respite enabled by a late-2008 change to state law was short-lived:
Submitted by Rich Toscano on March 5, 2009 - 9:43pm
Today the California Employment Development Department revealed, unsurpringly, that San Diego's job losses have been severe. The latest update included a revision to last year's data, which painted a bleaker picture of recent months than had previous releases. (This is also unsurprising, given some of the statistical jiggering that takes place with the job numbers).
The graph below shows the year-over-year rate of change for the three hard-hit sectors related to housing, as well as the rest of the economy and all sectors combined. Remember, this is a rate of change graph. So if a line turns up but is still below zero, as in the case of finance, that means that the sector in question is still shrinking, but just not as quickly as before. And if a line is below zero but flat, as in construction, that means that the sector is still losing jobs, but is doing so at a steady rate.
Submitted by Rich Toscano on March 3, 2009 - 10:43pm
Well, people continue to ask questions about those home price rate-of-change graphs so I thought I'd put up a few more.
Some people wanted to see a longer-term view that showed the year-over-year price change during the boom as well as during the bust. And some wanted to see the actual price index alongside the rate of change. The below graphs offer both. In order to keep things readable I gave each price tier its own graph:
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|* Rich Toscano is a registered representative of and offers securities and investment advisory services through Girard Securities, Inc., a registered Broker/Dealer, Registered Investment Advisor, and member FINRA/SIPC. Pacific Capital Associates is not a subsidiary or affiliate of Girard Securities. The views and opinions expressed on this site are not those of Pacific Capital Associates or Girard Securities, Inc. The information on this site should not be construed as investment advice.|