San Diego Housing Market News and Analysis

There was a bit of divergence in the size-adjusted median price of San Diego homes sold in July. By this measure, single family home prices were up a robust 3.7 percent from June, whereas condos gave back most of June's explosive gain with a subsequent 6.0 percent decline.

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I noted earlier in the week (and incessantly before that) that home prices have a seasonal tendency to rise in the spring and summer even during the midst of a multi-year price decline.

That sounds like a good enough excuse to make a chart.

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For the first time in nearly three years, the Case-Shiller index of San Diego home prices increased from the prior month. The index rose .4 percent between April and May, the latest data available.

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Last week we took a look at the fact that more homes have been going into foreclosure than have been selling during 2009. I wrapped it up on this circumspect note:

For all the relief that the spring-summer rally has brought to the real estate bulls, it seems a bit premature to uncork the champagne before that orange line climbs out of the abyss.

The orange line in question appeared on a graph tracking the ratio of monthly home sales to monthly homeowner default notices. To save you some clicking, here it is again:

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Last week we learned that the region lost almost 55,000 jobs between June 2008 and June 2009. The chart below indicates how largest San Diego sectors fared over that time period:

That chart looks a lot different from older versions in which the bubble-related sectors were the only ones racking up the big losses.

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The local unemployment rate hit 10.1 percent last month, according to the latest estimates from California's Employment Development Department. The below graph shows that June's unemployment rate was notably worse than anything seen in the prior two recessions -- not that anyone was suggesting otherwise.

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In the comments to the prior post a graph of the sales-per-trustee-sale ratio was requested. Here it is:

I am the first to admit that I don't know exactly how this whole shadow inventory thing is going to play out. But I am certain that it is a legitimate area of concern.

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This is all becoming a bit routine. I write about how little housing inventory is currently for sale in San Diego. Then I write about the apparent mountain of "shadow inventory" -- homes that have entered foreclosure, or may yet do so, but that are not yet on the market. And then I go on and on about the irony, market distortions, and general analytical weirdness that result from having so much shadow inventory looming alongside so little genuine inventory.

In my defense, sometimes I reverse the order in which I write about these things.

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Well, we sure do appear to be having a good old fashioned spring (and now summer) rally.

I upgraded the site software to get some security patches in. If anyone sees anything squirrely, please let me know at rich [at] piggington [dot] com.

I also took another swipe at installing private message functionality. It's not the prettiest thing in the world, but as far as I can tell from my quick tests they finally got it working. As you might expect from the name, this module allows people to send private messages to other piggs without having to share email addresses or identities.

So feel free to give it a whirl and let me know if you run into any problems. You have to create a login, of course... after you log in the module can be accessed via the "Private messages" link in the left navigation.

I will be appearing on the voiceofsandiego.org radio show this Sunday, 12 noon, on AM 600 KOGO. Since we recorded the segment today, I already know that bagging on the CA Association of Realtors will be one of the topics du jour -- always a good time! An archive of the show should be put up here late Sunday or thereabouts.

Nothing too exciting happened in the latest release of the Case-Shiller San Diego home price index. Unless the lack of a noticable decline qualifies as exciting. Which I suppose it kind of does, given the context.

The aggregate price index for San Diego County declined a mere .1 percent between March and April, the latest month measured. The stabilization is no big surprise considering the strength in other price measures and the run on inventory currently underway.

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Frequent readers know I've spilled a lot of virtual ink on the concept of "shadow inventory" -- the fairly vast category of homes that are in foreclosure but not for sale. This overhang of potential but not-yet-actual inventory contrasts with the very low levels of inventory currently for sale.

The title of this post refers to a recent entry describing how current inventory is even lower than it seems. That prior article contained a graph showing that the amount of current inventory is unusually low compared to the number of sales, even before taking account of the reverse-shadow inventory effect.

But while sales are numerous in comparison to available inventory, homes in foreclosure are quite numerous in comparison to sales.

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Between May 2008 and May 2009, according to the latest estimates, the San Diego economy lost 52,200 jobs. This 4 percent year-over-year decline is the fastest we've yet experienced during the current downturn.

The below graph shows the rate of job loss for the overall San Diego economy in orange. As usual I've also included the three sectors -- construction, finance, and retail -- that I have long contended grew unsustainably large as a result of the housing bubble. The green line indicates changes in employment outside the three bubble sectors:

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