San Diego Housing Market News and Analysis

This really brought me back:

http://www.macleans.ca/economy/realestat...

("Just jump in" was a thing a realtor actually said to me back in 05 or so).

It's a full on speculative mania (to resurrect a term I was fond of back in the day). Except this time, the exact same KIND of bubble burst horrifically just 10 years ago.

People just never learn... or, maybe more accurately: they never stop just believing whatever they feel like.

Just thought this would be a fun link for the old timers...

The median price per square foot surged in February:


This level of price increase is in some sense what should be expected given the pretty severe lack of inventory, but to see prices go up so much in a single month is unusual:

I just posted an article at Voice of San Diego which, along with its companion piece, will serve as background to these ongoing valuation updates. Here's what they discuss:

• A framework for measuring San Diego housing valutions (why compare home prices to local rents and incomes, and what the current elevated valuations might mean)
  
• How mortgage rates figure into everything (they haven't been as big a driver of home prices as most people believe)
  

I'll be referring back to these two articles when I update the valuation charts -- that way, I can spare regular readers (and myself) the rehashing of all the background info each time.

So for starters, check those out if you haven't.  The second article in particular might be of interest even to old-timers, as it's the most thorough piece (that I can remember anyway) I've written on the role of mortgage rates.

OK, with that background behind us, let's check in on the data as of year-end 2016. Here is the primary chart... San Diego home valuations:

I'm working on some valuation stuff to be posted soon. Meanwhile, here's a selection of graphs on the January resale data.  Take note of that steep decline in months of inventory from this time last year... if that doesn't rectify itself, it's a sign of higher prices immediately ahead.

Here's the final score for the year 2016:


Looking at the single family number, which gives the best read, prices increased a couple % more than inflation, and roughly the same as wage and rent growth.  As one would expect in a given year, all things being equal. 

This time they're not equal in that valuations began the year at an elevated level.  However, as discussed in the afore-linked article, perhaps valuations can remain higher than usual while interest rates remain lower than usual.

Back to the monthly data, prices did pull back, but that's reasonable at this time of year:

Months of inventory crept up a bit, but still made for the lowest November in recent years:


The 3-month average of prices crept up as well:

Just a quick update on the September data.  Here's an overview:


Inventory remained very tight, with months of inventory easily at the lowest level in the past four years:

Hi all - I'm finally getting around to updating the valuation data; a full writeup is forthcoming but here in the meantime are some charts: