Housing market

Analysis of the (primarily) San Diego housing market.

A History of the Housing Bubble

Submitted by Rich Toscano on June 19, 2005 - 8:34pm

If San Diego home prices do not reflect fundamentals, exactly how did they get to such rarified heights, and what keeps them aloft? It's a fair question, and an important one: understanding how the bubble started will be crucial in identifying how and when the bubble ends. The purpose of this article is to provide a very brief overview of how we got here.

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Recession Is Not a Prerequisite for a Housing Downturn

Submitted by Rich Toscano on June 1, 2005 - 10:04pm
The last real estate bust in San Diego was precipitated by a local recession, as thousands of aerospace and defense industry employees lost their jobs and were forced to sell their homes. This fact appears to have engendered an oft-repeated theory that San Diego home prices cannot drop unless we experience a recession. Such a line of reasoning may be comforting, but it is deeply flawed.
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Get On the Ride

Submitted by Rich Toscano on May 21, 2005 - 10:10pm
All San Diegans should consider reading the Money Magazine article entitled Boomtown USA to get an understanding of what's happening in our city. The article concerns San Diego's multi-year housing runup in general, but in particular it spends a lot of time detailing the resulting perceptual distortions on the part of our citizenry.
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The Math Skills of Crowds

Submitted by Rich Toscano on April 21, 2005 - 10:15pm
An article in today's Economist concerning the global housing bubble contains this stunning claim:
"A recent survey of buyers in Los Angeles indicated that they expected their homes to increase in value by a whopping 22% a year over the next decade."
Let me get this straight. Real estate is, by every conceivable measure, far more expensive than it's ever been. Homes are already so incredibly expensive that most people can't buy one unless they take out a teaser-rate mortgage or they have a pile of cash from the sale of their prior home. Affordability is at an all-time low, despite the fact that interest rates are about as low as they've been since the 1950s. And from these lofty heights, homebuyers are expecting prices to rise a staggering 22% a year for the next decade?
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The Madness of Crowds

Submitted by Rich Toscano on April 18, 2005 - 10:17pm
Yesterday the UT ran a story concerning the rampant condo speculation that continues to infest our fine city. I highly recommend reading it if you haven't done so already.

The various data (e.g. the fact that 37% of 2004 condo conversion buyers were speculators) is very interesting, if not terribly surprising. The interviews, on the other hand, are just jaw-dropping, as they really hammer home the enormous amount of money being spent on the basis of threadbare and entirely emotional analysis.

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Cuckoo For Condo Gluts

Submitted by Rich Toscano on April 3, 2005 - 10:20pm
The recent San Diego Daily Transcript article about condos in Downtown San Diego contains some frightening statistics...
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Speculation Nation

Submitted by Rich Toscano on March 1, 2005 - 10:22pm
For all the ink that is being spilled about speculation on the part of real estate investors, very little attention is paid to the "stealth speculation" perpetrated by people who, anticipating big equity gains, stretch themselves to the limit to purchase their own homes. This article examines both types of speculation, as well as the ugly aftermath should the expected gains fail to materialize.
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Everybody Wants to Live in San Diego

Submitted by Rich Toscano on February 8, 2005 - 10:23pm
For the first time since the mid-90s, San Diego County experienced a net out-migration from July 2003 to July 2004. So why are home prices going up? Because this real estate market is not being driven by fundamentals... yet.
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