San Diego Housing Market News and Analysis
Analysis of the (primarily) San Diego housing market.
Submitted by Rich Toscano on May 15, 2006 - 8:57pm
Who spiked the water cooler at the Union-Tribune office? Or, maybe, who stopped spiking it?
Ah, I kid because I love. But seriously, their latest piece on the sharp rise in mortgage defaults is unusually somber. And it has some cool graphs.
Submitted by Rich Toscano on May 10, 2006 - 8:54am
Señor Risk has published an interesting chart showing that Californians' rush into real estate as a career is still going strong. There is still optimisim aplenty out there.
Submitted by Rich Toscano on May 9, 2006 - 10:11am
Will Carless at voiceofsandiego.org wrote a piece yesterday on San Diego's rising foreclosure rate. That's certainly an ominous sign, as a surge of "must-sell" inventory is the most likely catalyst to drive prices substantially lower at some point. But foreclosures are rising off their "everyone has a huge equity cushion"-lows and are still fairly contained, from a historical perspective. So while the directional growth trend is bad news, the amount of foreclosures is not as of yet a big problem.
Submitted by Rich Toscano on May 7, 2006 - 4:27pm
The market is starting to give us a more conclusive view of what's to come. This month's report will check in on the widely-expected spring rally and will use the resulting conclusions to forecast where things may go from here.
Submitted by Rich Toscano on May 1, 2006 - 6:07pm
I found an interesting tidbit on the Housing Bubble Blog. A researcher looking at historical California inventory levels found that once the supply of homes hits 9 months worth of sales, median prices fall "on a consistent basis." This is a statewide stat, but it at least gives us some general insight as to the location of that line in the sand past which increased inventory starts to push prices south.
In regard to price declines, what's more important than the overall inventory level is the amount of "distressed" inventory supplied by owners who have to sell at whatever price they can get. But those two numbers tend to trend up and down together.
As I will discuss more in the monthly housing report (which is coming very soon, and will include new data sources to provide a more current read on the market than is supplied by DataQuick) the combined condo and SFR inventory in San Diego is currently a little below 8 months.
Submitted by Rich Toscano on April 19, 2006 - 8:34am
Will Carless at voiceofsandiego.org has written a piece about an apparent exodus of wealthy investors from San Diego real estate. It has an interesting bit of data: 18% of San Diego home purchases last year were made for investment purposes. (This is out-and-out investing, not the stealth speculation I discussed last week).
Elsewhere in the article, various financial advisors tell us that it may be a good time to unload those alligators. "If you have an investment property, this is a wonderful time to get the heck out," counsels one. I completely agree... though I would posit that last year would have been an even more wonderful time.
Submitted by Rich Toscano on April 17, 2006 - 9:23am
The Union-Tribune recently issued a piece about last month's housing numbers. As is usual in the media these days, the tone was "cautiously optimistic." In other words, things have seriously slowed down, but the median price is still hanging in there... so things are going to be fine, right? Karevoll illustrates the sentiment nicely:
Submitted by Rich Toscano on April 10, 2006 - 11:08am
Calculated Risk informs us that the new guidance on non-traditional mortgages may be with us in a few months.
Lansner at the OC Register is worrying about late tax payments, correctly identifying that homeowners are starting to get squeezed now that rates are rising and prices have flattened.
And—I know this is week-old news, but it bears repeating—the wonderful folks at the NAR inform us that 40% of homes purchased last year were for investment or vacation purposes. That, friends, is a little something we call speculative excess. But it's ok, says NAR: "Some of these purchases may be a third, fourth or fifth investment property, showing that housing is a good investment." Huh?
Submitted by Rich Toscano on April 4, 2006 - 10:03am
Below we will take a look at the action in the housing market as we wrap up the winter season. Data to be crunched includes prices, price growth (or shrinkage) between varying regions, sales volume, and inventory. We'll also discuss the merits of the "median price" statistic as an indicator for real estate pricing power.
Submitted by Rich Toscano on April 3, 2006 - 9:45am
One of the forum participants, a long-time San Diego appraiser, has posted a really good summary of how things played out during the last down cycle in the local real estate market. I think it's very instructive for those of us who weren't punched in to the housing scene back then—so much so that it deserves to be its own post. Without further ado, quoting "Bugs":
Submitted by Rich Toscano on April 2, 2006 - 9:32pm
The Union-Tribune is running a story about the slowing Downtown condo market. They actually cite several examples of people losing money! Here's one example...
Submitted by Rich Toscano on March 20, 2006 - 10:33am
In the OC Register, Jonathan Lansner connects the dots about housing and Orange County's economy. In discussing a burgeoning slowdown in OC (corroborated by slowing profits by businesses and increased skipped payments by consumers), Lansner notes:
Yes, exactly. The press is slowly but surely coming around to the idea that the housing bubble's enormous (but temporary!) stimulative effect on the economy is an issue of great import.
Submitted by Rich Toscano on March 15, 2006 - 7:03pm
This week is kind of a mess, so I'm going to have to make do with a "drive-by posting," in which I simply point to someone else's content.
Today's someone-else is Barry Ritholtz of The Big Picture, a financial blog of which I am quite fond. And the content is his recent post on the impending wave of mortgage resets in 2006 and 2007: $2 trillion dollars worth of mortgages, to be exact, or about 1/4 of all mortgages.Many borrowers in this category still have plenty of equity.
Submitted by Rich Toscano on March 13, 2006 - 11:07pm
The LA Times is running an article on the wave of condo/hotels, which appear to be bubble's latest foray into absurdity. Why buy an overpriced condo, when you could buy an overpriced condo that you only get to live in for one month per year?
As an aside, lest you start to think that San Diego is overcome by doom and gloom, I give you a potential buyer at the Hard Rock Hotel:
Submitted by Rich Toscano on March 11, 2006 - 7:26pm
A speech on housing by the Fed's William Poole made the rounds this week. I thought I'd link to it because it clearly illustrates a point that I think is crucial to always keep in mind: that the folks at the Federal Reserve are politicians first and economists second.
Let's jump right in with this line from his speech:
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