Housing market

Analysis of the (primarily) San Diego housing market.

Shambling Towards Affordability: November 2011

Submitted by Rich Toscano on December 11, 2011 - 6:37pm
Below you will find updated charts showing how San Diego home prices (and, further on down, monthly payments) stack up against local incomes and rents.

Longtime readers know that I consider the price ratios to be absolutely fundamental to determining whether housing is fairly valued.  It makes intuitive sense that home prices would tend to track incomes and rents: incomes, because they determine how much money people have available to pay for housing; and rents, because rent prices reflect how much San Diegans are willing and able to pay to put roofs over their heads when there is no speculative or investment element involved.  The historical record bears out this intuitive logic, as San Diego's home price-to-income and price-to-rent ratios have tended to be strongly mean-reverting over time.

Of course, there are other factors to take into account, such as employment trends, rates, and divergences between the various sub-markets that make up the aggregate numbers.  But these ratios represent a good starting point in determining where the market stands from a valuation standpoint.

The first chart shows the ratio of the typical San Diego single family home to San Diego per capita income.  (Median household income would be better but there's less data available -- however, having charted the data that is available, there is actually very little difference in the ratios whether they are based on household or per capita incomes).  The price to income ratio is in blue, with historical mortgage rates charted in gray to provide context, and the historical median price to income ratio (what we might somewhat simplistically designate as "fair value") in red.



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November 2011 Resale Data Rodeo

Submitted by Rich Toscano on December 7, 2011 - 10:28am
The median price per square foot of San Diego resale homes took a bit of a hit last month, down 2.5% for single family homes, .3% for condos, and 1.9% in aggregate.  (The single family home price series is tends to give a more dependable read on the state of pricing power).  On a year-over-year basis, the median price per square foot was down 8.9% for single family homes, 4.4% for condos, and 7.5% in aggregate.



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October 2011 Resale Housing Data Rodeo

Submitted by Rich Toscano on November 12, 2011 - 6:13pm
I didn't spot anything that seemed very meaningful in the October data.  In specific, both prices and month of inventory were virtually unchanged.  Therefore I offer the monthly roundup of graphs without further comment:


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September 2011 Resale Housing Data Rodeo

Submitted by Rich Toscano on October 19, 2011 - 5:45pm
The median price per square foot of San Diego resale homes was down .2% for single family homes, up .8 percent for attached homes, and up .2% in aggregate in September.  Let's call it flat for the month:



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August 2011 Resale Housing Data Rodeo - With Words!

Submitted by Rich Toscano on September 20, 2011 - 9:42am
Well, I didn't say the words would be interesting or anything.  But there are some.

The median price per square foot took a bit of a hit last month, falling for both detached homes and condos and down about 3% overall.



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July Resale Housing Data (Chart) Rodeo

Submitted by Rich Toscano on August 29, 2011 - 10:46am
A chart-only edition of the July rodeo follows below.  Summary: prices very flat in the aggregate, but months of inventory creeping up a bit.



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June 2011 Resale Data Rodeo: Taciturn Edition

Submitted by Rich Toscano on July 23, 2011 - 4:36pm
Hey Piggs -- I've been an extra busy bee this month, as the utter lack of new content would suggest.  I'm coming up for air to post a quick rodeo, but this month I'll let the graphs largely speak for themselves.  While nothing very interesting happened in the data last month, I will just note the following:
  1. Prices have been pretty weak considering seasonality, but
  2. ...the months-of-supply figure has been remarkably stable and rests at a level that probably precludes much in the way of downside.
Now, enjoy the soothing silence of the graphs to follow...


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May 2011 Resale Data Rodeo

Submitted by Rich Toscano on June 13, 2011 - 7:04pm
All the gloom and doom about the national market notwithstanding, the median price per square foot of San Diego resale homes nudged up again in May:



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April 2011 Resale Data Rodeo

Submitted by Rich Toscano on May 11, 2011 - 4:42pm
The median price per square foot of San Diego resale homes was somewhat mixed last month: up .2% for single family homes, but down 1.7% for condos, and down .3% in aggregate.



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Blast from the Past: Revisiting Moody's and Forbes' Colossally Inept 2006-Era Housing Forecast

Submitted by Rich Toscano on April 23, 2011 - 10:54am

Remember when housing started to falter back in 2006, and the mainstream economists' version of bearish tough talk was to predict that prices might just go up slightly less quickly in the future?

Tim of the always amusing Seattle Bubble blog recently dug up a prime example of that very thing, wherein Forbes magazine sternly informed readers:

"Get used to it--the seller's market is closing up shop."

...and:

"Now the question is more how hard is it going to land..."

Wow, that's some fairly bearish-sounding rhetoric.  I guess that's why Forbes' teamed up with Moody's to determine that prices would... pretty much just keep going up. (Fun graphs after the jump...)
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March 2011 Resale Data Rodeo

Submitted by Rich Toscano on April 12, 2011 - 9:56am
The median price per square foot for San Diego homes rose for the second time in a row in March.  This price measure was up .3% for detached homes, 4.8% for attached homes, and 1.6% in aggregate.  The detached home series is the most reliable of the three, so any actual price increases were probably muted -- nonetheless, prices look to have increased for a second month in a row.



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February 2011 Resale Housing Data Rodeo

Submitted by Rich Toscano on March 17, 2011 - 5:50pm
Last month, the median price per square foot of existing homes sold in San Diego rose notably -- by 2.2 percent for single family homes, 2.5 percent for condos, and 2.4 percent in aggregate:



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Shambling Towards Affordability: Year-End 2010 Edition

Submitted by Rich Toscano on February 14, 2011 - 6:32pm
It's time for some valutions.  The charts below show San Diego housing valuation ratios updated through year-end 2010.

Let's start with the price-to-income ratio.  The decline in home prices since the summer brought this ratio back down to 7.6 -- right in the middle of fair value territory per these ratios.  In fact, it's 5% below the median price-to-income ratio over this entire period (which incidentally is 8 on the nose).



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January 2011 Resale Housing Data Rodeo

Submitted by Rich Toscano on February 7, 2011 - 8:44pm

Well, it's 2011, and yet I am still lacking the following:
  • laser eyes
  • hyper-evolved glasses-wearing chimp assistant
  • self-aware email client
  • minotaur
  • huffable bacon
  • tank full of precogs to help me match my outfits
Someone please tell science to get on it.  For now, we'll have to make do with the January resale data.

The median price per square foot took a bit of a beating last month: down 3.0 percent for detached homes, 7.2 percent for condos, and 4.5 percent in aggregate:



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December 2010 Resale Data Rodeo

Submitted by Rich Toscano on January 9, 2011 - 7:26pm
Well, so much for the spring 2010 double-tax-credit-stimulated rally.  The last of the effects of that entire affair have been wiped out with the latest month's drop in the median price per square foot.  Prices by this measure were down in December by 3.5 percent for single family homes, 2.4 percent for condos, and 3.0 percent in aggregate.  This brings the overall median price per square foot down to 1.2% lower than it was in December 2009 -- the first year-over-year decline in this price measure since October 2009.


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