San Diego Housing Market News and Analysis
~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:
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Submitted by Rich Toscano on August 22, 2009 - 8:35am
I have long suspected that the whole "reset explosion in 2010 (or thereabouts)" factor was a lot more complex than people often make it out to be. Especially for San Diego... we are at the forefront of the bubble on the way up and then the way down; it makes sense that our reset peak might happen earlier as well.
But there are bigger reasons than that to doubt the reset explosion thesis. One is that resets don't matter -- all those loans were written at a time of substantially higher short-term rates, so a simple reset to the prevailing market rate should actually lower the mortgage payment. Recasts, not resets, are the danger. Recasts occur when the borrower starts paying down principal on an interest-only loan (in which they've paid only interest, as the name suggests) or a negative amortization loan (in which they haven't even paid all the interest, resulting in a principal that's been growing since they took the loan out). Option ARMs would fall in the latter category, assuming that the borrowers had chosen to take the "option" to pay less than the full payment amount.
Submitted by Rich Toscano on August 21, 2009 - 7:10pm
The California Employment Development Department released the latest job estimates today. According to these estimates, July saw San Diego hit its highest year-over-year rate of job loss in the downturn to date. Between July 2008 and July 2009, the region lost 55,100 jobs, a decrease of 4.2 percent.
The following graph shows how many jobs were gained or lost in the three housing bubble-related sectors I like to highlight -- construction, finance, and retail -- along with all other sectors. While the trouble started in the housing-beneficiary sectors, the growth of that green bar shows that losses have mounted outside those sectors over the past year.
Submitted by Rich Toscano on August 16, 2009 - 7:10pm
It's time for a little update on the long-term aggregate housing valuation charts. (The emphasis is on the word "aggregate" -- let's just get it right out of the way these charts are based on a single home price measurement that encompasses the high end, the low end, and everything in between).
To sum it up, we've gone pretty much nowhere since the prior checkup on these numbers as of December 2008.
The home price-to-income ratio had dropped further in the early part of the year, but rising home prices and falling incomes have combined to nudge the ratio back up in recent months.
Submitted by Rich Toscano on August 12, 2009 - 7:39pm
As discussed previously, prices on the whole rallied again last month:
Submitted by Rich Toscano on August 7, 2009 - 7:40am
My old pal and foreclosure guru Ramsey has penned another insightful missive that he was kind enough to let me post here on Piggington. I'll let the essay speak for itself, but I will add in regard to the conclusion that I think this shows why the Fed is trapped in the monetization game at this point (and why there is little chance that they will stop until forced to do so). Read on...
Submitted by Rich Toscano on August 6, 2009 - 4:54pm
Real short notice for a short (10 minute) radio segment -- I will be on KOGO AM 600 tomorrow starting, they tell me, at 7:37AM. Whether I'm coherent at that hour is another question.
Submitted by Rich Toscano on August 5, 2009 - 9:54am
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.
Submitted by Rich Toscano on July 31, 2009 - 11:34am
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.
Submitted by Rich Toscano on July 28, 2009 - 2:50pm
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.
Submitted by Rich Toscano on July 23, 2009 - 4:42pm
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:
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:
Submitted by Rich Toscano on July 20, 2009 - 5:14pm
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.
Submitted by Rich Toscano on July 17, 2009 - 5:52pm
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.
Submitted by Rich Toscano on July 17, 2009 - 8:50am
In the comments to the prior post a graph of the sales-per-trustee-sale ratio was requested. Here it is:
Submitted by Rich Toscano on July 15, 2009 - 1:55pm
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.
Submitted by Rich Toscano on July 10, 2009 - 4:22pm
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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