~Welcome to the Econo-Almanac~

I started this website in mid-2004 to chronicle San Diego’s spectacular housing bubble.  The purpose of the site remains, as ever, to provide objective and evidence-based analysis of the San Diego housing market. A quick guide to the site follows:

  • New visitors are advised to begin with the Bubble Primer or (if wondering about the site name) the FAQ list.
  • Housing articles I’ve written are found in the main section below.
  • Discussion topics posted by site users are found in the “Active Forum Topics” box to the lower right.
  • This website is an avocation; by day I help people with their investments as a financial advisor*.  Market commentary and more can be found on my firm's website.

Thanks for stopping by…

Housing's Summer Super-Bounce Runs Out of Steam

Submitted by Rich Toscano on December 6, 2009 - 12:01pm

After rising for seven months in a row, San Diego resale home prices finally took a breather in November. The median price per square foot actually rose by .9 percent for condos, but it dropped by 1.3 percent for single family homes, of which many more are sold.  A volume-weighted aggregate of the two dropped by .7 percent for the month, ending the streak that began in April.

continue reading at voiceofsandiego.org

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Forecasting the Real Estate Non-Market

Submitted by Rich Toscano on November 30, 2009 - 3:12pm

Readers may have noticed that I don't make the kinds of sweeping predictions about the housing market that I used to.

There are two reasons for this.

The first is that housing prices are no longer at an extreme. This can be seen in a semi-recent update to my price-to-income and price-to-rent charts, which show local home valuations returning from orbit and heading back to earth over the past several years. It's pretty easy, when homes are stunningly overpriced, to forecast that they will eventually reach something quite a bit closer to their fundamentally justifiable values. But once the valuations go from "extreme" to "somewhat reasonable," you just don't have that same analytical wind at your back.

The second reason for the dearth of forecasts is more specific to this particular time, place, and subject matter.

continue reading at voiceofsandiego.org

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Home Price Bounce Falters at the High End

Submitted by Rich Toscano on November 24, 2009 - 7:59pm

The Case-Shiller index numbers for September are in. As had been suggested by the median price data, the aggregate Case-Shiller index ended up rising for another month.

There was an interesting divergence, however. The aggregate index rose by .9 percent between August and September, while the low and medium price tiers each rose by 1.8 percent. But the high-priced tier actually dropped by .9 percent. This is the first drop in any of the index tiers since the price bounce began in early 2009.

continue reading at voiceofsandiego.org

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More Mixed Signals from the Job Market

Submitted by Rich Toscano on November 20, 2009 - 8:21pm

The annual change in the number of people employed at San Diego companies improved again last month. Between November 2008 and November 2009, local companies shed 52,200 jobs, a decline of 4.0 percent. Which, as miserable as it may sound, is the best year-over-year job number in six months:

continue reading at voiceofsandiego.org

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Dueling Job Surveys

Submitted by Rich Toscano on November 18, 2009 - 6:08pm

A commenter over at Piggington (my own little internet stomping ground) raised an interesting point in regard to last month's article on San Diego employment. The reader noted that the monthly data I cite measures the number of jobs held in San Diego with no regard for whether the job holders are actually San Diego residents. There is a separate data series that tracks the employment status of San Diego residents whether they are employed in the county or elsewhere. And, for the time being, the two job surveys are providing mixed signals.

continue reading at voiceofsandiego.org

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The Housing Battleship-Turned-Party Boat

Submitted by Rich Toscano on November 13, 2009 - 7:30pm

A while back, I noticed a funny thing about the year-over-year rate of change in the Case-Shiller index of San Diego home prices. It seemed that movements in the annual price change rate from positive to negative or from negative to positive provided a good indicator that the long-term price trend had changed direction.

Allow me to demonstrate with some graphs.

The graph below shows the home price index in blue with the year-over-year rate of change for the index in orange. It covers a ten-year period more or less centered around the early-1990s housing bust.

continue reading at voiceofsandiego.org

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October 2009 Resale Data Rodeo

Submitted by Rich Toscano on November 9, 2009 - 3:54pm

It looks like the spring/summer rally has continued into autumn, as the median price per square foot was up 1.5% from the prior month:

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Divining Case-Shiller

Submitted by Rich Toscano on October 29, 2009 - 6:53pm

The Case-Shiller index is the most accurate measure of aggregate home price changes, for reasons long-since described here. But it's been an ongoing gripe of mine (and everyone's) that the index lags so badly. The data that was just released a couple days ago on October 27, for instance, only tracks home prices through August.

So lately I've taken to using the median price per square foot data to guess, for lack of a better word, what the Case-Shiller index values for more recent months might be. An example of this estimation can be found in the graph below, which appeared in the writeup of the most recent median price data:

Here's how I arrive at these estimates. (Non-nerds may wish to fall asleep for the remainder of this paragraph)...

continue reading at voiceofsandiego.org

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Case-Shiller's Summer Super-Bounce Continued in August

Submitted by Rich Toscano on October 27, 2009 - 5:25pm

Nobody should be very surprised that the Case-Shiller index rose again in August.

This time around, the long-suffering low tier turned in the best performance with a robust 2.5 percent increase. The middle tier rose 1.6 percent for the month and the high tier increased .3 percent, with the aggregate index rising 1.6 percent.

Here's a graph of the three price tiers and the aggregate index since their bubble peaks:

continue reading at voiceofsandiego.org

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Foreclosures Edge Down Again

Submitted by Rich Toscano on October 25, 2009 - 8:32pm

Here, a little later than usual, is the monthly foreclosure activity update.

The following chart shows that default notices and trustee sales, respectively the initial and final stages of foreclosure, both declined last month.

But both defaults and trustee sales remain at levels that are, shall we say, elevated.

continue reading at voiceofsandiego.org

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Housing-Related Job Sectors Taking the Big Long-Term Hit

Submitted by Rich Toscano on October 20, 2009 - 8:42pm

Let's take a slightly different look at the construction, finance/real estate, and retail job sectors. I have long highlighted these three industries in my analysis because they were directly involved in the housing bubble, benefitting from the respective frenzies for building homes, lending funds, selling homes, and spending all the money that issued forth from the regional home equity ATM.

continue reading at voiceofsandiego.org

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Job Losses Shrink for a Second Month

Submitted by Rich Toscano on October 18, 2009 - 11:13am

The rate of year-over-year job losses in San Diego declined again last month, according to the latest estimates from the EDD. Between September 2008 and September 2009, the region lost 52,000 jobs. This is not great, obviously, but it's an improvement over recent months.

continue reading at voiceofsandiego.org

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September 2009 Resale Data Rodeo

Submitted by Rich Toscano on October 11, 2009 - 12:41pm

Some have asked what distinguishes a Data Rodeo from a Chartfest or for that matter the rarely seen Chart Extravaganza. The answer, which I will fabricate as I type this sentence, is that Data Rodeos are reserved for the monthly roundup of resale data, whereas the two alternate names are used for generic chart collections based upon the levels of extravagance and general chartiness contained therein.

I hope that clears everything up.

Prices

The rally in San Diego's median price per square foot continued through September, with the ppsf rising 2.2% for detached homes, 5.5% for (much more volatile) condos, and 3.1% for a volume-weighted aggregate.

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Government Intervention in the Housing Market a Fact of Life

Submitted by Rich Toscano on October 4, 2009 - 9:32pm

For a long time I have been discussing, with various degrees of rantiness, government intervention in the housing market. When I first touched on the subject in early 2007, before any bailouts had begun, some of the potential interventions I envisioned seemed kind of far-fetched. By late 2007, as I noted in a Manimal-referencing followup, many of these same interventions were already underway.

And now? The lengths to which the government has gone to prop up the housing market have surpassed even my own cynical expectations. By a long shot.

continue reading at voiceofsandiego.org

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Case-Shiller Chartfest

Submitted by Rich Toscano on September 30, 2009 - 3:37pm

The July update of the Case-Shiller San Diego home price index is in. The index increased by 2.5 percent from June -- a substantial (if expected) one-month bounce.

As usual, Kelly has done a nice writeup on month-to-month changes with and without seasonal adjustments. I'll supplement her piece with some visual aids.

First up is a look at the three price tiers and the aggregate price index from their respective peaks in the 2005-2006 region:

continue reading at voiceofsandiego.org

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