~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…

December 2018 housing data: highest months-inventory since 2011; prices decline

Submitted by Rich Toscano on January 21, 2019 - 3:36pm
Hey all -- few words this month, and mostly charts. I will note the two stats I called out in the title...

1. Months of inventory is highest since 2011 (which was right at the tail end of the bust).



December is always highest but you can see the big increase over recent years:



2. The higher inventory seems to have started impacting prices. Single family price/square foot was down 3.3% for the month. Here's how that looks on the Case-Shiller proxy (3-month average of single-family price/sqft):



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November 2018 housing data: months of inventory jumps again, but prices steady

Submitted by Rich Toscano on December 15, 2018 - 12:20pm
Months of inventory notched up another big increase in November:



This measure of supply vs. demand is now 80% above where it was a year ago. Granted, that was coming off a very low level. But it just goes to show how much, and how quickly, things have changed.

Here's a longer term view to put that in perspective. It's not too far above late-2013 and 2014 levels. But it's quite a bit above what the market had gotten to recently -- and it is the highest since the bust ended. (In my view the bust ended in January 2012, which was when prices reached their inflation-adjusted low).



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October 2018 housing data

Submitted by Rich Toscano on November 7, 2018 - 9:43pm
October looked pretty similar to September... for commentary, see the September writeup. Updated graphs below.

Also, check out this article arguing that there is a "new normal" level of housing inventory thanks to various changes in the industry (including technology). This supports the logic behind the "new normal" months-of-inventory vs. price change graph, as initially suggested by gzz. The article suggests that 4 months of inventory is the new level; just fitting it via eyeball in San Diego it looks to have been closer to 2.5 months in recent years. But that could change in the next downturn.





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September 2018 housing data -- the slowdown is here

Submitted by Rich Toscano on October 7, 2018 - 4:26pm
The burgeoning slowdown I described in last month's post seems to have arrived... witness, months of inventory:



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August 2018 housing data -- a cooling market

Submitted by Rich Toscano on September 15, 2018 - 3:00pm
My favorite single indicator of housing market strength is the following ratio:

(active inventory for sale) / (number of monthly pending sales)

This ratio is called "months of inventory," because it measures how many months it would take to sell the current amount of inventory at the current sales pace. Thus it is a handy single indicator of both supply and demand. It also happens to be very predictive of near-term price changes (a relationship which I first learned of from the great Bill McBride).

Getting on with the current state of affairs: the months-of-inventory ratio (let's called it MI for this post!) shows that the market has cooled off quite a bit in recent months. Here's a graph of MI for each month over the past almost-4 years:



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June 2018 Housing Data

Submitted by Rich Toscano on July 11, 2018 - 10:16am
Let's start with some big picture stuff... here are assorted MoM and YoY stats:



Prices have decelerated but are still rising, at least based on the 3 month average for single family homes:



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Shambling pretty damn far afield from affordability, at this point

Submitted by Rich Toscano on May 21, 2018 - 1:28pm
Time for a valuation update! These graphs should be familiar to regular Piggs; for anyone who'd like some background please see these two Voice of San Diego articles: how to measure housing valutions and how mortgage rates impact prices.

Onto the graphs... here is San Diego home valuation index, measuring how expensive homes are compared to local incomes and rents:



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March 2018 Housing Data

Submitted by Rich Toscano on April 7, 2018 - 2:21pm
Apologies for the delay in updating the data... let's dive right in!

Home prices have been very strong so far this year, with the median price per square foot showing a big jump in February. Bear in mind that this is a noisy figure, but the fact that the single family median held firm in March strengthens the case that the price increase is "for real":



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December 2017 Housing Graphs

Submitted by Rich Toscano on January 28, 2018 - 6:14pm






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November 2017 Housing Graphs

Submitted by Rich Toscano on December 10, 2017 - 6:42pm
Interpretation-wise... pretty much the same situation as last month. So, the updated graphs are presented without comment below...





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October 2017 Housing Data

Submitted by Rich Toscano on November 19, 2017 - 5:59pm
Inventory is higher than in the spring, but remains very low for this time of year:



There has nonetheless been some seasonal weakness to home prices:



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September 2017 Housing Data: looking more like 2016 than 2013

Submitted by Rich Toscano on October 8, 2017 - 4:49pm
Another quick one... the developing divergence between 2013 and 2017 has continued. Unlike 2013, when months of inventory rose rapidly off low levels, we've seen inventory rise very non-rapidly in the past few months. It looks more like 2016 now -- but lower.



Despite the scarcity, prices have leveled off:



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August 2017 Housing Charts: a break from the 2013 pattern

Submitted by Rich Toscano on September 16, 2017 - 3:19pm
Hey all, mostly graphs this month but I did want to call out one interesting development.  Thus far, this year has been strikingly similar to 2013 in terms of months of inventory. But the pattern seemed to diverge last month -- and not in a way that buyers will like:



We shall see if this disparity continues. If so, it will argue for accelerating prices immediately ahead, notwithstanding the typical fall lull. This chart looks pretty (short-term) price bullish too:



Many more graphs below...

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July 2017 Housing Data Charts-n-Graphs

Submitted by Rich Toscano on August 19, 2017 - 5:53pm




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June 2017 housing data: prices up, inventory up more

Submitted by Rich Toscano on July 10, 2017 - 4:17pm
Home prices drifted further upward in June:





But in some good-ish news for potential buyers, inventory made a bit of a comeback, with months of active inventory increasing from 1.3 to 1.6 months:

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