I’m Going to Rain on Your Parade

[Anonymous]

Steve, go to the U.S. Census website, and see the details:

http://www.census.gov/popest/counties/tables/CO-EST2005-05-06.xls

Change in San Diego County population, 7/04-7/05:

Births minus deaths = 25K
Net migration to other parts of U.S. = (43K)
Net migration from other parts of the world = 17K
Total = (2K)

Not pretty: big outflow to other parts of the U.S., partially offset by immigrants, probably largely illegals from Mexico (I’m not racist — my Mom immigrated from Mexico in the 50s).

No, Steve, the “buying power” of San Diego County residents is going down, as it’s shifting to younger folks and immigrants.

[powayseller]

Steve, I didn’t comment on the population change, because I know that immigrants and births are causing population to increase. BUT, San Diego adults ARE LEAVING at the rate of 44,000 annually. This is a start reversal, because we used to have more than that moving INTO San Diego. The guess among Census Bureau was these 44,000 people are going to Riverside, Inland Empire, or other states, anywhere where the cost of living is less.

There are 8 homes to choose from for every buyer, based on current sales and inventory. Got this from a realtor. I think June sales were 3,000, and with inventory at 23K, that’s about how it works out.

If you enter the MLS data into Excel, you notice that high end was 8.5% of sales last year, and is 10% of sales this year. High end is still Hot. I am puzzled how you can disagree with data. ” I don’t think that the current figures are skewed by more sales of higher-end homes.” There’s nothing to think about, it’s a fact. The low end got soft first, because those buyers got squeezed out by rising interest rates and rising prices. Look, you could get an entry level house 2 years ago for say, $1500/month; today, with higher prices and higher interest rates, that same entry level house might cost $1900/month. I made up the numbers, but the point is made.

Are you a realtor, Steve? If you are, I shouldn’t have to explain the housing prices to you. I can’t be everyone’s gopher.

There is a housing shortage for cheap housing, like $120K houses, and apartments costing $300 – $700/month.

One last comment: I can’t waste my time anymore repeating stuff that I’ve written about multiple times. Go back through the threads, and read the Bubble Primer, and then come here with new questions. I can’t be everyone’s gopher or personal secretary. I am only interested in discussing new ideas, not rehashing all the old stuff. If you think housing prices will level off, go buy a bunch, and stock up! If you think they won’t go any lower, go buy downtown condos. There are some great discounts out there. Take advantage, Steve. “It’s a buyer’s market”, after all….

[rankandfile]

The point I was trying to express by citing the SANDAG and SCAG figures and the planned expansion of freeways was more to show that SoCal and SD County are not over-built, but rather have a lot more room to build. And people are leaving not because it’s overbuilt, but rather because it’s so expensive to live here.

Many younger (25-40), middle-class families are choosing to relocate to states like Nevada, Arizona, or others because they can actually own a home and raise a family there without overextending themselves like they would in California.

Again, the primary reasons people come here are for the job opportunities and the weather. Job growth may be ok here(I don’t know the latest stats), but wages have not kept pace with expenses. And the really nice weather is only within so many miles of the coast, where it is way too costly to own a decent home. So, many are basically left with the option of living in a hot desert; but they will be paying more for things like homes, gas, taxes, etc., than they would in other states like Nevada or Arizona. For example, a family earning $100k in San Diego would only have to earn about $75k/yr to maintain the same standard of living Arizona.

[JWM in SD]

Give it up Steve, your comments are either disingenous or you really don’t understand what’s going on right now. Spend more time reviewing the earlier threads and maybe go to Ben Jone’s blog to get a wider view of driving forces (the housing bubble is really a credit bubble: the high house prices are a symptom of it). Otherwise, quit trollin…

[SD Realtor]

Hi Steve –

I read your posting and your arguments are thoughtful. While I disagree with your assessment I have to be honest and say we do not have enough hard data yet. I can DEFINITELY say that the amount of traffic I have seen in several areas of town has SEVERELY decreased. Of course some condo complexes have increased in value. However there are more that have not. For instance the original developers at La Jolla Regents sold out to another developer several months ago. That developer is moving forward with the next phase sales at below last summer pricing. Lucera in UTC is well below 2004 pricing. Many complexes in San Carlos have depreciated already. Provencal in Sabre Springs has depreciated. SFR’s in Lemon Grove have depreciated bigtime. What about Otay Ranch? What are your thoughts there?

This is what is frustrating for me. Alot of press likes to stick to the median price, and statistics, and studies.

Meanwhile I am down in the trenches working directly with the sellers seeing it first hand. You are on the appraisal side. So you get to visit homes in escrow! Good times!! Do you look at the cancelled, expireds, and withdrawns?

Why doesn’t anyone ever talk about the numbers of those? Why doesnt Dataquick ever publish the amounts of listings that went into those categories?

Again, I do respect your opinions and I think they are thought out and presented well. I don’t agree but I respect them.

[sdduuuude]

Steve,

I think you have done a good job describing today’s market in SD. Things really aren’t all that bad.

I think what you are missing is an analysis of the FUTURE of the market. Median price is a good things to look at when understanding the market today. Sales and inventory are decent future indicators – and you did touch on that.

But to better understand the future one must look at indicators such as interest rates, Loan-to-Value ratios, the number of variable rate loans, asian currency policy, price-to-income ratios, housing developer activity, – anything that gives one a deeper understanding of what major long-term factors are at play behind the basics of median price, sales and inventory.

Without looking to the future indicators, you could certainly see this as a soft landing which could go in any direction.

For me, this is what distinguishes a reporter from and analyst: A reporter tells you how things are. An analyst tells you how things are going to be. Your post shows you are a fair and honest reporter. However, I’ll stick with Rich when it comes to analysis.

[PD]

I totally agree with sdduuuude.

[sdrealtor]

and that is his role as an appraiser, to comment on what is and what has been not what will be!

[Author]

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