San Diego Housing Market News and Analysis

San Diego County employment rose slightly between October and November, according to the Employment Development Department's estimates.  The bulk of that increase, however, was owed to seasonal retail hiring.

The effects of the holidays can be seen in the following two graphs.  The first does not adjust for seasonality, and shows an increase of 3,700 jobs:


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The median price per square foot for detached homes didn't budge between October and November.  This fit nicely into the "flat-to-down" home price thesis I've been advancing in recent months.  The 7.4% monthly rise in the condo median made for quite a poorer fit to my theory, however.

The number of people employed in San Diego County increased half a percent between September and October, according to the Employment Development Department's latest estimates:


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Back in July I put up a chart showing that the number of months' worth of housing inventory was highly correlated to home price changes.  That same chart suggested that, in accordance with a longstanding rule of thumb, six months' of inventory seemed to mark the line between upward and downward pressure on home prices.

Below is an update of that chart...



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October was a down month for the median price per square foot.  By this measure, detached homes were down .8%, condos by 3.3%, and the aggregate number by 1.6%:

As anticipated, the Case-Shiller index of San Diego home prices fell in August.


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I'm a finance and economics nerd, not a legal nerd, so I'm trying to make heads or tails of the whole foreclosure signing mess just like everyone else.   Fortunately a friend sent along a Citigroup research piece, summarizing the views of a Georgetown law professor named Adam Levitin, that I found very enlightening.  Unfortunately, the piece is proprietary so I can't link to it.  But I will try to sum up some of the major points.

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Now that I have a version of Excel that allows a greatly expanded color selection, I took the opportunity to update the graphs to match the site's muted theme.  (I'm using a loose definition of "now"... I figure there is wiggle room to the effect of a year or so... but let's not quibble about the details).

What's that you say?  You're interested in the actual data, and don't want to read a discussion about color schemes?

Well.  It takes all kinds, I guess.

Price-wise, the data didn't have anything too exciting to offer:

As many of you have doubtless read over the past week or so, it seems that some loan servicers have been a bit lax in following those pesky "rules" when processing foreclosures. 

In some states, California not among them, the foreclosure process requires that servicers sign an affidavit swearing that they have confirmed certain facts about the loan to be foreclosed upon.  In their efforts to blaze through all the piled-up foreclosures, some servicers signed such forms in bulk without having actually confirmed the individual facts.  This puts the legitimacy of some foreclosures into question.

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The Case-Shiller index of San Diego home prices was up by .7 percent between June and July... 


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We haven't checked in on the household job survey in a while.  This set of employment data is distinct from the "establishment survey" I usually cite in a couple of ways.  The household survey is conducted by polling -- as the name would suggest -- households about their employment status, while the the establishment survey polls businesses.  The effect of this difference is that the household survey measures employment among people who live in San Diego (regardless of where they are employed) and the establishment survey gauges employment at San Diego businesses (regardless of where those businesses' employees live).  The second big difference is that the household survey counts self-employed people, while the establishment survey does not.


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The news has been pretty good on the San Diego job front this year.  Not great, or even close to it -- but good.  Employment rose steadily in the year through June even when accounting for the temporary effect of US Census jobs.  Employment decreased in July, but this is a seasonal effect that happens each year largely as a result of school getting out.  Despite the summer break for educators, July saw employment in the "non-bubble" sectors of the economy grow on a year-over-year basis for the first time since October 2008.

Last month, in contrast, was not so good.  That is, according to the estimates from the payroll survey conducted each month by California's Employee Development Department.

The graph below shows that San Diego employment is estimated to have dropped by .2 percent between July and August:


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The median price per square foot of San Diego homes dropped in August, at least on the whole. Condos managed to rise by 2.0% for the month, but detached homes were own 3.5%, putting the volume-weighted aggregate at -2.0%:

The Case-Shiller home price index for San Diego was up a mild .4 percent overall in June.  Hidden in that increase, however, was a drop in the high-priced tier (composed of the most expensive one-third of homes sold during the April-through-June measurement period).

This continues the general (though recently dormant) trend in which the rebound has been far stronger in the low-priced than the high-priced tier, with the mid-priced tier splitting the difference:


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The continued rise in San Diego home prices has pushed valuation ratios northward -- but according to the home price-to-per capita income ratio, prices are still fairly reasonable: