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 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.
Submitted by Rich Toscano on September 4, 2006 - 11:44am
A longstanding premise of mine has gone as follows: to argue that housing will continue to flourish because of San Diego's strong economy is circular reasoning, because in reality the economy owes much of its purported strength to the housing boom.
I thought it would be fun (that's right, fun) to chart out some of the characteristics of San Diego's job market during the big housing boom. I have designated as my starting point the year 2000, chosen primarily and somewhat arbitrarily as a "neutral" year for residential real estate. The depths of the mid-90s housing bust were well behind us, housing mania was still a couple of years away, and home valuations were in the middle of their historic range. San Diego's housing market was, in other words, neither too hot nor too cold. It was just right.
Submitted by Rich Toscano on September 1, 2006 - 10:34am
30-year fixed rates have dropped like a rock since late July:
Submitted by Rich Toscano on August 29, 2006 - 12:41pm
Fellow blogger Calculated Risk, who has tenaciously followed the developments of the federal regulation on non-traditional mortgages, tells us that the guidelines will be put in place within 60 days.
For those who are unfamiliar, I wrote a piece on the new lending guidelines back in December when a draft version was released.
Submitted by Rich Toscano on August 25, 2006 - 3:45pm
As I recently tooled around the San Diego Chamber of Commerce website, I came across a document called the "San Diego Economic Bulletin: Forecast 2005 & 2006." This document is a gold mine of the kind of local data that causes a nerd like me to mewl with delight.
But my delighted mewling turned to confused mewling as I read the section on population growth.
The first accompanying chart indicates the U.S. Census Bureau's take on who's coming and going in San Diego. (Readers who are particularly interested or lonely can find the gigantic Census Bureau spreadsheet here.)
Submitted by Rich Toscano on August 24, 2006 - 5:25pm
Over the two-plus years I've been publicly rambling about the San Diego housing market, I've spilled very little ink on the topic of stated income mortgages--the so-called "liar loans" that require no proof of borrower income.
It's not that I find this particular spawn of the housing bubble uninteresting. Far from it. But the fact is that I try to concentrate my efforts in the realm of the measurable and verifiable, whereas most information about stated income loan abuse is of the more anecdotal variety. There ever plenty of anecdotes, to be sure--I think we've probably all heard a version of the story wherein the landscaper or Starbucks barista is mysteriously pulling down six figures. But there has really been no way to measure how serious the problem really is.
It seems now that some more reliable information is beginning to surface.
Submitted by Rich Toscano on August 22, 2006 - 10:54pm
The California Association of Realtors (CAR) recently announced a new index to measure home price affordability for first time buyers. The distinguishing feature of this new affordability index appears to lie in its looser definition of what exactly is affordable: whereas the prior index assumed a 20 percent down payment and a maximum of 30 percent of household income spent on housing costs, this new index allows for a 10 percent down payment and up to 40 percent of income devoted to house payments.
This is entirely ridiculous. Buyers now shell out a record portion of their earnings for home payments, as well as taking on previously unthinkable levels of debt in order to purchase their homes. The fact that people are so commonly forced to stretch their fiscal limits does not, as CAR would seem to imply, indicate that it is now more affordable to do so. It means precisely the opposite.
Submitted by Rich Toscano on August 22, 2006 - 6:59pm
I heard some folks were having trouble with the rich text editing capabilities so I wanted to expound on that a bit. (To non-nerds, “rich text” enables the use of italics, bolding, clickable links, and the like).
Techies among you can manually enter the typical markup codes if you’d like, but for the rest, you are able to utilize a rich text editor. To enable this editor, click the "enable rich-text" link when you are writing a comment, as pictured here:
Submitted by Rich Toscano on August 18, 2006 - 11:11am
It's a media frenzy! For me, anyway, as I'm now making two media appearances this weekend—but that's well up from my typical rate of 0 media appearances per weekend.
Actually, "appearance" isn't the most fitting term. I've been invited to chat with Mark Miller on his radio show, "Talk to the Lawyer." The show will air this Saturday, August 19, at 2PM, on KCBQ 1170AM. You can also listen online at www.kcbq.com.
Also joining will be Ben Jones of The Housing Bubble Blog fame. The show will be broadcast live, so feel free to call and harass us at 888-344-1170.
Submitted by Rich Toscano on August 17, 2006 - 8:25pm
I was just re-reading Catherine MacRae Hockmuth's excellent piece on her personal decision to become a renter. And I was pretty blown away by the volume (lots) and tenor (highly emotional) of user comments.
Catherine has already addressed some of the comments in a followup article. My purpose today is not to address any specific point, but rather to take note of the fact that her article created such a firestorm.
Let's try a little thought experiment. Imagine if Catherine had written that article in the year 2000. Would anyone have gotten lathered up enough to accuse the author (and, in one case, the entire Voice staff) of immaturity and ignorance? Would they have scornfully written off the author as a new and well-deserving member of the permanent renter underclass?
Submitted by Rich Toscano on August 17, 2006 - 10:06am
A thousand apologies to those who tuned in to KSWB last Sunday. There was a mixup on the date: I will be appearing on Take 5 this Sunday, August 20. That's Sunday, August 20, 10:30PM on KSWB (channel 5).
This time I mean it.
To those who have requested such, I will try to get an online video of the appearance. However, I can't promise anything. I'm just a simple software guy, and your video streams confuse and frighten me.
Submitted by Rich Toscano on August 16, 2006 - 3:18pm
When home prices rise, homeowners tend to spend more money. In some cases their newfound real estate wealth emboldens them to save less and spend more, while in other cases they actually borrow against increased home values to increase their spending money. In either scenario, the net effect is that people buy more stuff.
This so-called "wealth effect" is a widely acknowledged side effect of asset market booms.
Submitted by Rich Toscano on August 11, 2006 - 1:26pm
San Diego homeowners with adjustable rate mortgages can breathe a sigh of relief. After 17 consecutive -- albeit modest -- rate increases, the Federal Reserve has decided to stand pat and keep its federal funds target rate at 5.25 percent.
The accompanying chart shows the seemingly unstoppable rise in the 1-Year Constant Maturity Treasury, an index often used to adjust monthly mortgage payments, during the Fed's tightening campaign.
Submitted by Rich Toscano on August 10, 2006 - 10:18pm
After getting hammered last month, the median prices for both SFRs and condos were up... the latter slightly, the former somewhat dramatically:
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