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 October 18, 2006 - 7:35pm
Hi everyone - I am back in action after a road trip with the missus up beautiful Highway 1. I need a little time to put together the most recent housing data; in the meantime there is a sneak peak at voiceofsandiego.org.
Submitted by Rich Toscano on October 7, 2006 - 11:24am
Last week, a consortium of federal regulatory agencies released their long awaited "Guidance on Nontraditional Mortgage Product Risks." The linked-to press release tells us exactly what they mean by "nontraditional":
As Will Carless pointed out back in June, 70 percent of San Diego home loans in 2005 were of either the interest-only or payment-option type. So it would appear that the new regulations put some of San Diego's favorite loan products directly in the crosshairs.
Some highlights of the new guidelines follow:
Submitted by Rich Toscano on October 6, 2006 - 9:31am
Some readers wanted to know more about my semi-cryptic reference to "the new gig," so I thought I'd provide a little more detail here. Don’t worry, I'm not going to start incessantly shilling for the new business. However, I may occasionally shill for the new business. Like now, for instance.
I have joined an existing firm called Pacific Capital Associates*. The firm offers "comprehensive financial planning" -- investment management, estate planning, insurance, and the like. They also offer real estate services and home loans, although they are firmly in the real estate bear camp and have routinely talked people out of buying. (And I’m proud to say that they have never put a single client into an Option ARM).
What I do is talk to people about their finances, make recommendations, and directly manage their investment portfolios. This investment management is the primary focus of what I do, and I employ the same analytical approach to global investment markets -- independent, fundamentally-based, and forward-looking -- that I have taken with San Diego real estate.
I'd be happy to meet with any Econo-Almanac readers who would like to get my thoughts on their financial situations or on investing in general. It doesn't cost anything, and there will be absolutely no pressure – I may be the least salesy guy on Earth. I simply talk to people and help them make informed financial decisions. After that, if it is appropriate and desired, I can help implement a plan or manage investments (and it is only at this point that any cost is incurred). If you're interested, please e-mail me at firstname.lastname@example.org and we can set up an appointment.
While on the topic of scheduling, I am leaving town next week so the site will probably be devoid of content during that time.
Okay, we now return you to your regularly scheduled doom-mongering.
* - Pacific Capital Associates offers securities and investment advisory services through Girard Securities, NASD/SIPC
Submitted by Rich Toscano on October 5, 2006 - 5:17pm
After what seemed like an unstoppable rise since the beginning of the year, long-term mortgage rates have since plummeted in an equally relentless manner.
Here in San Diego, though, the majority of buyers do not use 30-year fixed rate mortgages like those depicted by the blue line in the chart. The local housing market is influenced less by fixed rates than by adjustable mortgage rates, the the decline in which has been less dramatic.
Submitted by Rich Toscano on October 3, 2006 - 8:36pm
It definitely appears that inventory has peaked for the year:
Submitted by Rich Toscano on October 3, 2006 - 9:38am
If you are finding that you have to log in multiple times, just hit refresh a couple times after the first login. It ends up that you are actually logged in, but you are seeing a cached version of the page which makes it look like you aren't logged in yet. By refreshing the page a couple times you should get a "new" version which will reflect your logged-in status.
Submitted by Rich Toscano on September 27, 2006 - 1:49pm
People now widely acknowledge the once-blasphemous: that the housing market can slow, that home prices can decline, and that both of the above are happening here and now. But we are a cheerful people, apparently, and such admissions are often quickly followed with the disclaimer that the housing market should be back in action soon enough.
Take, for instance, the following quote from El Cajon Councilman Gary Kendrick, as appearing in a recent U-T article on El Cajon's stalled condo conversion market. Mr. Kendrick is singled out only because this is a very typical example of the many similar proclamations I've heard expressed by assorted authority figures in recent times. Says Gary:
Well, maybe I'm singling him out a little bit because that last line is so priceless. You may wish to record it for future generations to enjoy.
Submitted by Rich Toscano on September 26, 2006 - 10:14am
Sorry about the radio silence this past week... I've been real busy getting the new portfolio management/financial advisory gig* off the ground**. What writing I did get a chance to do over at the voiceofsandiego.org concerned the Amaranth blowup, not housing, so I didn't link to it from here.
Now I am compelled to come out of hiding because of bond yields.
I made note a while back when the yield on the 10-year Treasury Note finally crossed the elusive 5% mark. The 10-year yield eventually rose to 5.24%, but as the below chart (courtesy of StockCharts.com) shows, it went into freefall soon thereafter.
Submitted by Rich Toscano on September 20, 2006 - 11:25am
Yesterday, Scott Lewis wrote a great piece on the logical inconsistencies of some of the the city's affordable housing efforts.
One such policy, while having escaped Scott's truculent attentions, nonetheless deserves to be highlighted as especially irrational. It is described in a recent Daily Transcript piece called "Sanders seeks action on affordable housing" (subscription required):
...the [San Diego Housing Commission] is continuing its efforts to expand homeownership through the creation of two new, first-time homebuyer programs...
Giving people money to buy houses artificially stimulates housing demand (sorry, "expands homeownership"), the effect of which is to render housing less, not more, affordable. It's effectively a government subsidy for the housing bubble and entirely the wrong way to approach the problem.
Submitted by Rich Toscano on September 19, 2006 - 10:43am
The site was getting a little big for its britches, usage-wise, so this past weekend I moved it to a more powerful server. I believe I (eventually) got everything working on the new machine, but if you encounter any problems, please let me know.
Submitted by Rich Toscano on September 15, 2006 - 11:39am
As we've all heard by now, year-over-year median price comparisons continue to decline. Here's a picture of resale median prices:
Submitted by Rich Toscano on September 13, 2006 - 8:44pm
Now that this month's housing data has arrived, I thought it would be a good time to briefly review the trouble with the "median price" as a measure of real estate pricing power.
Many observers, noting that the median home sale price was 2.2 percent lower in August 2006 than in August 2005, would assume that the typical home is now worth 2.2 percent less than it was a year ago. But this assumption is not necessarily correct. Because while the median price is a decent measure of how much the typical buyer paid, it does not tell us what that typical buyer got for the money.
When it comes to measuring actual changes in home market values, the median price can be thrown off by the following:
Submitted by Rich Toscano on September 7, 2006 - 7:22pm
The plot thickens. Or maybe it... thinnens. I don't know. The point is that the folks at the San Diego Chamber of Commerce have gotten to the bottom of our recent mystery about why their population data differed so much from that of the Census Bureau. Yet their answer has only raised another question.
The Chamber's Rachel Laing elaborates:
Submitted by Rich Toscano on September 6, 2006 - 9:27am
As a follow-up to the prior post ("Job Dissection"), I wanted to zoom in on the past year and have a look at how the various industries have fared more recently. The results are found in the accompanying chart.
Construction is up 3 percent from last year. This makes sense--as housing demand erodes, developers are scrambling to finish their construction projects sooner rather than later.
Submitted by Rich Toscano on September 5, 2006 - 7:43pm
Inventory growth appears to have flattened.
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|* Investment advisory services and securities offered through Girard Securities, Inc., member FINRA and SIPC. Investment advisory services also offered through Crawford Capital Management, Inc. Pacific Capital Associates and Crawford Capital Management, Inc. are not affiliated with Girard Securities, Inc.|