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 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.
Submitted by Rich Toscano on July 7, 2009 - 8:36pm
Well, we sure do appear to be having a good old fashioned spring (and now summer) rally.
Submitted by Rich Toscano on July 5, 2009 - 8:29pm
I upgraded the site software to get some security patches in. If anyone sees anything squirrely, please let me know at firstname.lastname@example.org.
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.
Submitted by Rich Toscano on July 3, 2009 - 5:14pm
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.
Submitted by Rich Toscano on July 1, 2009 - 9:57am
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.
Submitted by Rich Toscano on June 28, 2009 - 7:34pm
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.
Submitted by Rich Toscano on June 21, 2009 - 9:16pm
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:
Submitted by Rich Toscano on June 18, 2009 - 3:15pm
Yes, it's a word. I think.
Another California anti-foreclosure measure went into effect this week. It's called the "California Foreclosure Prevention Act," and it puts a 90-day moratorium on certain qualifying foreclosures. The name "California 90-Day Procrastination on a Subset of Foreclosures Act" was apparently deemed too unwieldy.
Submitted by Rich Toscano on June 15, 2009 - 4:06pm
San Diego housing inventory dropped again last month, but supply may be even tighter than it appears. I'll talk about that more below, but first, let's have a look at the data.
The number of existing San Diego homes for sale last month was 32 percent lower than the same time last year, while the volume of sales was 19 percent higher. These two trends combined to make for the lowest supply of for-sale housing in years.
Submitted by Rich Toscano on June 11, 2009 - 12:53pm
Three weeks ago, according to quasi-government mortgage giant Freddie Mac, the average rate for 30-year fixed mortgages stood at 4.82 percent. This week, the average rate was 5.59 percent.
Submitted by Rich Toscano on June 8, 2009 - 6:45pm
As I wrote a few days back at voiceofsandiego.org, we may just be experiencing a geniune spring fling:
Submitted by Rich Toscano on June 5, 2009 - 11:56am
San Diego has just experienced a second consecutive month of solid gains to the size-adjusted median home sale price. It would appear that the Spring Rally is more or less official.
Between April and May, the size-adjusted median price rose 3.3 percent for detached homes and 2.9 percent for condos. The accompanying graph chronicles the declines from the peak in this price measure.
Submitted by Rich Toscano on June 2, 2009 - 6:32pm
I'm back from my vacation and ready to clog up the Internets with some bandwidth-hogging images. Kelly put together a nice overview of the latest Case-Shiller home price data last Tuesday, so I will just put up some charts to add color.
Each price tier's decline from its respective peak:
Submitted by Rich Toscano on May 25, 2009 - 11:07am
I will be out of town this week, so you all will be able to enjoy a few days without being assailed by charts and graphs. First, let's wrap up the series on San Diego rents.
A couple months back, I wrote a blog entry maintaining that San Diego home prices in aggregate had finally become "reasonable" in comparison to local incomes and rents. Several readers replied by arguing that while the ratio of home prices to rents might be back in the middle of its historical range, rents themselves had become unsustainably high as a result of bubble-era economic distortions and were likely to fall substantially.
Now underway is the fourth in a series of blog entries in which I've tried to determine whether or not San Diego rents became unmoored from their fundamental underpinnings as the housing bubble took place. The first installment compared rent levels with local per capita income; the second measured rents against median household income. Both comparisons indicated that rents were pretty well in line with incomes after all. The third entry compared San Diego's housing availability to its population and determined that, as of 2008 anyway, the rent to income ratio was quite reasonable considering the number of San Diegans vying for the region's supply of homes.
The purpose of this exercise is to determine whether the housing bubble somehow caused rents to become unsustainably expensive. If we find that 2008 rents were in line with their fundamentals, that doesn't mean that rent prices couldn't drop in the future due to a recession-induced deterioration of those fundamentals. But this is a different question from whether rents were overpriced to begin with.
That latter question is the one I've been trying to answer, and so far, the answer has been that as of last year, rents appeared reasonable in comparison to San Diego incomes. The last topic I want to look at is to what extent incomes themselves might have been distorted by the housing bubble.
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