~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:

  • New visitors are advised to begin with the Bubble Primer or (if wondering about the site name) the FAQ list.
  • Housing articles I’ve written are found in the main section below.
  • Discussion topics posted by site users are found in the “Active Forum Topics” box to the lower right.
  • This website is an avocation; by day I help people with their investments as a financial advisor*.  Market commentary, an overview of our investment approach, and more can be found on my firm's website.

Thanks for stopping by…

Historical Home Sale Volume Measured in Dollars

Submitted by Rich Toscano on September 25, 2009 - 2:49pm

In response to last week's article on historical home sales, a reader requested charts expressing the sales data in terms of dollars' worth of homes sold instead of just the number of homes sold.

I had to cobble a few things together to make these charts. (Non-nerds may skip the rest of this paragraph). Ideally, the dollar volume of homes sold would be calculated by either just adding up individual prices of every sale or multiplying the average price times the number of units sold, which would both come out to a precise total of dollar volume. But I didn't have historical average prices. What I did have historical data on was the Case-Shiller index, which I rebased to the median price for all homes sold in San Diego in August 2009. This isn't exactly the same as the average price for any given month, for various reasons, but I suspect it will be close enough to get a general idea of what's going on.

Okay, everybody back? Here is the chart of existing home sales in terms of dollars since 1990, with the requisite 12-month average to smooth out the seasonal ups and downs:

continue reading at voiceofsandiego.org

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San Diego Job Losses Tentatively Slow

Submitted by Rich Toscano on September 21, 2009 - 7:31pm

According to the Employment Development Department's latest estimates, San Diego's year-over-year rate of job losses slowed for the first time in 2009. The region's employment decreased by 55,600 jobs between August 2008 and August 2009, a decline of 4.3 percent.

That is good news -- if the latest numbers turn out to provide an accurate picture of San Diego's employment situation.

continue reading at voiceofsandiego.org

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Despite Rebound, Home Sales Historically Weak

Submitted by Rich Toscano on September 17, 2009 - 8:54am

Home sales may have recovered strongly from the depths they plumbed in 2007 and 2008, but they are still anemic when compared to San Diego sales activity over the past couple of decades.

You wouldn't know it from looking at a chart of historical home sales. The number of sales, indicated by the blue line in the following graph, has recently vaulted up to the upper part of the historical range:

But it's not quite that simple. (Is it ever?)

continue reading at voiceofsandiego.org

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August 2009 Resale Data Rodeo

Submitted by Rich Toscano on September 13, 2009 - 3:33pm

As discussed in the prior article, the median price per square foot was up again last month, though not as strongly as earlier in the year:

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One of These Rallies is Not Like the Others

Submitted by Rich Toscano on September 5, 2009 - 1:50pm

Summer may be winding down, but the summer rally in the size-adjusted median price of San Diego homes continued another month. From July to August, the median price per square foot rose .7 percent for detached homes, 1.3 percent for condos, and .8 percent in aggregate.

This was not much of a month, relatively speaking, but it turns out that the mid-2009 rally as a whole has been unusually powerful.

continue reading at voiceofsandiego.org

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Cheap Homes Selling Faster, But Not Anything Like Before

Submitted by Rich Toscano on September 2, 2009 - 12:06pm

For a while I've been tracking a set of statistics that highlighted the great disparity between homes sales in higher-priced and lower-priced areas of San Diego. What we've been seeing for quite some time now is that compared to the expensive areas, the cheap areas had fallen a lot more in price but had experienced drastically higher sales volume on a year-over-year basis.

As of July, this disparity was still in place to some extent -- but the gap had closed substantially.

continue reading at voiceofsandiego.org

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More Foreclosures Than Home Sales, Again

Submitted by Rich Toscano on August 30, 2009 - 5:09pm

As with every month so far in 2009, more existing San Diego homes went into foreclosure than were sold. Just barely, though -- the ratio of home sales to default notices (the initial stage of foreclosure) was just gnat's eyelash below one-to-one. The ratio was .997, to be exact. That's the best sales-per-default ratio all year.

But it's still terrible. The following graph shows that while the sales-per-default ratio is above the lows set earlier in this downturn, it's still well lower than it was at any time during the two decades or so that preceded the current housing crash.

continue reading at voiceofsandiego.org

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The Rally is For Real, Say Case and Shiller

Submitted by Rich Toscano on August 26, 2009 - 4:27pm

The Case-Shiller index of San Diego home prices notched up its second monthly gain in June. Wait -- wasn't June, like, two months ago? And given that the index is based on the preceeding three months' worth of data, doesn't this give a better idea of the price movement in May (the middle month of the three) than June?

Yes and yes. Such lagginess is what we hate about the Case-Shiller index. What we love about it is the fact that it is an apples-to-apples comparison based on subsequent sales of the same homes. This provides a much more accurate view of home price changes than indicators like the median price, which measures how much the typical buyer is paying but doesn't account for what he or she actually got for the money.

continue reading at voiceofsandiego.org

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Reset Timebomb Not Such a Big Deal?

Submitted by Rich Toscano on August 22, 2009 - 8:35am

I have long suspected that the whole "reset explosion in 2010 (or thereabouts)" factor was a lot more complex than people often make it out to be. Especially for San Diego... we are at the forefront of the bubble on the way up and then the way down; it makes sense that our reset peak might happen earlier as well.

But there are bigger reasons than that to doubt the reset explosion thesis. One is that resets don't matter -- all those loans were written at a time of substantially higher short-term rates, so a simple reset to the prevailing market rate should actually lower the mortgage payment. Recasts, not resets, are the danger. Recasts occur when the borrower starts paying down principal on an interest-only loan (in which they've paid only interest, as the name suggests) or a negative amortization loan (in which they haven't even paid all the interest, resulting in a principal that's been growing since they took the loan out). Option ARMs would fall in the latter category, assuming that the borrowers had chosen to take the "option" to pay less than the full payment amount.

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A New Peak for Job Losses In July

Submitted by Rich Toscano on August 21, 2009 - 7:10pm

The California Employment Development Department released the latest job estimates today. According to these estimates, July saw San Diego hit its highest year-over-year rate of job loss in the downturn to date. Between July 2008 and July 2009, the region lost 55,100 jobs, a decrease of 4.2 percent.

The following graph shows how many jobs were gained or lost in the three housing bubble-related sectors I like to highlight -- construction, finance, and retail -- along with all other sectors. While the trouble started in the housing-beneficiary sectors, the growth of that green bar shows that losses have mounted outside those sectors over the past year.

continue reading at voiceofsandiego.org

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Shambling Towards (Though, More Recently, From) Affordability

Submitted by Rich Toscano on August 16, 2009 - 7:10pm

It's time for a little update on the long-term aggregate housing valuation charts. (The emphasis is on the word "aggregate" -- let's just get it right out of the way these charts are based on a single home price measurement that encompasses the high end, the low end, and everything in between).

To sum it up, we've gone pretty much nowhere since the prior checkup on these numbers as of December 2008.

The home price-to-income ratio had dropped further in the early part of the year, but rising home prices and falling incomes have combined to nudge the ratio back up in recent months.

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July 2009 Resale Data Rodeo

Submitted by Rich Toscano on August 12, 2009 - 7:39pm

As discussed previously, prices on the whole rallied again last month:

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Ramsey Su: Has Real Estate Bottomed?

Submitted by Rich Toscano on August 7, 2009 - 7:40am

My old pal and foreclosure guru Ramsey has penned another insightful missive that he was kind enough to let me post here on Piggington. I'll let the essay speak for itself, but I will add in regard to the conclusion that I think this shows why the Fed is trapped in the monetization game at this point (and why there is little chance that they will stop until forced to do so). Read on...

On the Radio Tomorrow Morning

Submitted by Rich Toscano on August 6, 2009 - 4:54pm

Real short notice for a short (10 minute) radio segment -- I will be on KOGO AM 600 tomorrow starting, they tell me, at 7:37AM. Whether I'm coherent at that hour is another question.

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Home Price Rally Scores Another Month

Submitted by Rich Toscano on August 5, 2009 - 9:54am

There was a bit of divergence in the size-adjusted median price of San Diego homes sold in July. By this measure, single family home prices were up a robust 3.7 percent from June, whereas condos gave back most of June's explosive gain with a subsequent 6.0 percent decline.

continue reading at voiceofsandiego.org

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