Another potential fly in the bear ointment

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Submitted by sdrealtor on December 19, 2008 - 10:10am

Just read an article that domestic in/out migration has turned the corner in SD County. For the first time in 5 years people are coming back to SD County. Singularly this will not save the market but it's another Yule Log on the Bull's X-mas fire.

Professor Piggy uses the case that the weather hasnt gotten better in SD which would justify higher prices but the corrollary is that the weather hasnt gotten worse which would discourage people from wanting to move here. I also saw a recent study that SD was the #2 place people would move for their dream job in US (behind NYC which unlike San Diego was on the list of the Top5 places people would never want to move to). As prices fall, we become more affordable and more attainable for folks who have California Dreamin" on their minds. Again this wont singularly save our market but its another factor we all need to consider.

Submitted by teatsonabull on December 19, 2008 - 10:41am.

It would be interesting to see how many of those folks "coming back to SD County" are going to be renting.

Too bad there aren't very many good jobs, let alone "dream jobs", in the whole of San Diego.

Lastly, I submit that the increased fire danger in all of Southern California (which will likely leave no area unburned over the next 20 years) is a change (for the worse) in the "weather" that may keep people away.

Submitted by 34f3f3f on December 19, 2008 - 10:43am.

I like the optimism, and hope business picks up for you guys eventually. I wonder how many of those domigrants are returning Californians, and how many births are included in that [figure]?

Submitted by peterb on December 19, 2008 - 10:51am.

Check your source for data accuracy. Those migration calculations are notoriously inaccurate. But that's not nearly as important as employment.

But I want this rally to stick for a while! So I agree that things are looking up!!!!

Submitted by 34f3f3f on December 19, 2008 - 10:51am.

teatsonabull wrote:
Lastly, I submit that the increased fire danger in all of Southern California (which will likely leave no area unburned over the next 20 years) is a change (for the worse) in the "weather" that may keep people away.

You probably would get used to the idea of raging fires all year round after a while, as people do earthquakes, but I agree, looking from the outside, it's not the greatest incentive. But again there's 'nought as queer as folk'. The recent fire map which someone posted, showed Rancho Santa Fe as being particularly prone. Total madness IMHO.

Submitted by LA_Renter on December 19, 2008 - 11:07am.

Here is a LA Times article making the opposite argument. This is the state of California and not S D specific.

http://www.latimes.com/business/la-fi-le...

"For the fourth year in a row, more residents left the Golden State than moved here from other states, according to a report released Wednesday by the California Department of Finance.

The outflow -- last seen during the economic and social struggles of the 1990s -- started when it became too expensive for most people to buy homes in the state, and has kept going throughout the bust with the loss of so many jobs.

The trend underscores the state's sour economy as layoffs continue, the fiscal strain on government grows and home values continue to decline."

IMO California will always rebound. It is the poster child of boom bust cycles. I'm a little leary on the current turn around in SD though. People need jobs to move here and I don't think we have seen the worst yet on that front, in fact I am certain of it.

Submitted by sdrealtor on December 19, 2008 - 6:56pm.

I didnt say traffic jams on the 8 and 10 but that the tide has turned. Had lunch with a college pal today who is fed up with the east coast. He's an independent consultant and can live anywhere. Makes a couple hundred K a year. He's got his place in escrow and will be bringing 500K to buy a new house here. Looking to spend 700 to 800K (i.e. only borrow 200 to 300K) out here which would put him under $2000/month totasl costs. Renting isnt in the equation for him as his sole reason to move here is lifestyle. I've got another friend getting working on the same and two more thinking about it now thats prices have fallen a couple hundred k for the homes they would want here. No traffic jam on the 8 or 10 but they cant be the only ones.

Submitted by 4plexowner on December 20, 2008 - 8:27am.

www.uhaul.com

10' truck one way

san diego to dallas: $1102

dallas to san diego: $595

~

there's my sniff test on which direction people are headed in (hint: it isn't towards san diego)

Submitted by teatsonabull on December 20, 2008 - 10:36am.

Until the state of California shows us how they are going to be able to pay their millions of state workers with something other than IOUs, you may want to encourage your friends to hold off on coming here.

Submitted by sdrealtor on December 20, 2008 - 11:40am.

4plex,
Thats a good one for the low end of the market but for the middle and high end its irrelevant. I know that I am well past the idea of a self move as I suspect most Piggs would be as well.

David

Submitted by sdrealtor on December 20, 2008 - 11:42am.

I'm not able to encourage or discourage and the one I had lunch with yesterday while a good friend isnt and wont be my client. People do what they want.

Submitted by Fearful on December 20, 2008 - 12:39pm.

sdrealtor wrote:
4plex,
Thats a good one for the low end of the market but for the middle and high end its irrelevant. I know that I am well past the idea of a self move as I suspect most Piggs would be as well.

Anybody feel up for doing that same quote from a mainstream moving company, e.g. Allied?

Submitted by sdrealtor on December 20, 2008 - 1:07pm.

that would more relevant

Submitted by denverite on December 22, 2008 - 11:55am.

I have been tracking uhaul rates for about 4 years, mostly to/from san diego/denver (and San antonio). I followed the largest residential moving truck rates. The ratio of the "move from" SD to "move to" for the aforementioned cities pretty much held constant at about 2.7. In early Dec 2008 that ratio dropped to around 2.1. I believe there are fewer families moving out of SD because the employment picture in destiation cities is currently not bright. Since California will probably be one of the last states to recover economically (many other states will recover earlier), it follows that outmigration will increase as the job prospects elevate in destination states.

Submitted by sdrealtor on December 22, 2008 - 12:00pm.

The dramatic drop in the ratio simply adds another log to my point. The tide is beginning to turn here,

Submitted by peterb on December 22, 2008 - 12:01pm.

CA unemployment is 8.4% and the nation is 6.7%. So this should indicate that people may leave CA for better opportunities of employment. Unless CA stagnates and the rest of the US catches up. But that's theory and guessing. These numbers are here and now. Both escalating.

Submitted by surveyor on December 22, 2008 - 12:04pm.

4plexowner wrote:
www.uhaul.com

10' truck one way

san diego to dallas: $1102

dallas to san diego: $595

~

there's my sniff test on which direction people are headed in (hint: it isn't towards san diego)

Hmmm, how much of the price differential is due to the higher cost of business here in San Diego/California as opposed to Dallas Texas?

The above analysis would be correct only if all things were equal, which is in and of itself, a false assumption.

Submitted by sdduuuude on December 22, 2008 - 12:34pm.

surveyor - That is easily determine by the cost of a local rental in either market.

Submitted by surveyor on December 22, 2008 - 12:58pm.

Unfortunately, the cost of a local rental in San Diego and Dallas doesn't illuminate either, because they do both have the same rates: $20/day.

So taking the reverse side of that argument, does a $20 rental in San Diego and Dallas imply that the cost of business in both cities is the same?

I'm just saying that the rates are apples and oranges. Yes, there is a difference, but implying more than that requires a little bit more study.

Submitted by CardiffBaseball on December 22, 2008 - 3:24pm.

I would think this could be checked by comparing Dallas-Phoeniz, Dallas-Las Vegas etc.

Or in the reverse comparing Dallas-Detroit or Dallas-Cleveland or something to see if it works in the other direction. Actually I would assume a net outt out-migration there as well.

Submitted by sdduuuude on December 22, 2008 - 4:30pm.

I'd say since the local cost is the same, then the price difference must be attributable to the fact that Uhaul needs trucks in San Diego more than Dallas.

Probably caused by higher net outflow of trucks from San Diego.

Could be a spike in San Diego demand for local moves, but I doubt it.

Maybe there is some difference in the cost of doing business, but I doubt it accounts for a 2x rate difference here.

I think it's probably a pretty good sniff test for the "self move" crowd. Probably contractors looking for a better market.

Submitted by Arraya on December 22, 2008 - 4:30pm.

The last thing we need is more warm bodies with a contracting economy. Well, unless they are bring jobs with them.

Out of curiosity I did a google search and came up with this. A study done by the Department of Finance recently.

http://www3.signonsandiego.com/stories/2...

According to population estimates from the state Department of Finance for the 12 months ending July 1, net domestic migration rose 3,032, compared with a decline of 3,373 the year before.

Adding the natural increase of births minus deaths and continued influx of international migrants, the county population rose 46,634, or 1.5 percent to 3,161,477, the highest one-year boost since 2002.

“That's quite an accomplishment,” state demographer Linda Gage said. “The state certainly had a (sustained) level of out-migration last year. San Diego is more unusual in having that (domestic migration) turnaround.”

The state lost 135,173 residents to other states and nations in 2007-8, about the same as the year before. But because of a net increase of international migration and more births than deaths, the overall state population rose 435,905 to top the 38 million mark for the first time.

San Diego State University geography professor John Weeks said the shift in San Diego's migration pattern could be an early sign of a bottoming out of San Diego's housing slide and a signal that the economy might pick up here earlier than elsewhere.

“If times are good relative to other places, even if they are not as good as five years ago, then we'll see some returned migration to San Diego,” he said, “and that will be indicative of better times here than elsewhere.”

Stating no outflow and international migration as cause for change in trends. I would suggest people are not moving out because they can't sell their homes, traditionally don't move in times of economic downturn and the international migration has always been there. So basically this is not a positive despite article spin.

Submitted by peterb on December 22, 2008 - 4:53pm.

Maybe someone should get hold of Uhaul and ask them, "why the difference in price for the exact same distance?". Doubt they're trying to hide anything.

Submitted by Eugene on December 22, 2008 - 5:10pm.

peterb wrote:
Maybe someone should get hold of Uhaul and ask them, "why the difference in price for the exact same distance?". Doubt they're trying to hide anything.

I can tell you what they'll answer: "the difference in price is because we are trying to keep our trucks from accumulating in Texas."

If they were to charge the same price in both directions, the number of trucks leaving San Diego would exceed the number of trucks leaving Texas.

Quote:
I know that I am well past the idea of a self move as I suspect most Piggs would be as well.

I don't know about most piggs, but I'm not past the idea of self moves. Especially when I can save 500 bucks by moving my stuff 20 miles with a U-Haul truck vs. paying someone to do it. I moved three times in the last three years, using U-Haul each time.

Submitted by peterb on December 22, 2008 - 5:55pm.

The US has many states. TX and CA, although large, are not the only games in town. Do they have to have the state that the truck is licensed in, keep its trucks there? If so, then they all have to go back to their place of origination. Mandatory round trips.

I guess one could also go from CA to TX loaded, and then come back to CA empty and drop the truck off at the origination place. Guess you'd pay mileage and the time used to make the round trip. And of course ,some opportunity costs....your time.

Submitted by Eugene on December 22, 2008 - 6:37pm.

They don't have to keep trucks in the same state, but they have to keep enough trucks at any given location. 135 thousand more people left California for other states in the last year than came here from other states. If U-Haul lets people take trucks anywhere they want, there's a risk that California would run out of trucks.

The way out is to keep raising one-way fees till a) they push enough customers to full-service moving companies to achieve inbound-outbound parity, or b) it becomes financially justified to hire drivers to drive empty trucks back to CA from TX.

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