~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…

January 2014 Housing Data Rodeo

Submitted by Rich Toscano on February 15, 2014 - 4:38pm
So much for that price pullback. The median price per square foot for single family homes rose in January, just hitting a new post-crash high:



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Shambling Towards Affordability: San Diego Housing Overpriced (But is it a Bubble?)

Submitted by Rich Toscano on February 2, 2014 - 10:54am
I must admit, I considered dispensing with the "Shambling Towards Affordability" title for these valuation updates, but in the end I decided that tradition must be maintained.  Anyway, other than the fact that the housing market is neither "shambling" nor moving "towards affordability," it's a perfect fit.

One thing I did change was to combine my two previous valuation indicators, home-prices-to-incomes and home-prices-to-rents, into a single metric.  I thought this would make it simpler to get a single big-picture view on home valuations, and it makes the chart maintenance a little easier on me as well.  The indicator is constructed simply by dividing the Case-Shiller San Diego home price index by an equally weighted average of San Diego rents and per capita incomes, and normalizing the whole deal so that January 2000 equals a value of 100 (just like the CS index). 

OK, enough background... let's have a look:

San Diego Home Valuation Index

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Chatting with Jim the Realtor

Submitted by Rich Toscano on January 31, 2014 - 10:31am

Hey everyone, I will be chatting with Jim Klinge on some sort of Google Hangout thing, as described here:

http://www.bubbleinfo.com/2014/01/29/sel...

Pop over to Jim's blog on Monday at 8PM to watch.

And btw, I PROMISE I will get the valuation charts updated this weekend, so perhaps that will be a topic of discussion.

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December 2013 Data Rodeo and Year-End Stats

Submitted by Rich Toscano on January 19, 2014 - 5:41pm
Hi all -  here are some year-over-year stats showing how what the market did for the year 2013...
  • Single family median price/square foot: +19%
  • Condo median price/square foot: +24%
  • Aggregate median price/square foot: +21%
  • Aggregate median price: +16%
  • Sales: -16%
  • Active inventory: +39%
  • Contingent inventory: -61% (contingent went from being 44% of inventory in Dec 2012 to just 18% in Dec 2013)
  • Total inventory: -6%
  • Months of inventory: +10%
Graphs of various data through December can be found below.  I am almost done updating the valuation charts so I should have those up soon.



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November 2013 Housing Data Rodeo

Submitted by Rich Toscano on December 29, 2013 - 7:24pm
Hello there... the usual roundup of housing charts can be found below.  Prices have declined a bit in recent months, in a somewhat more noticeable manner than the usual year-end lull -- but considering the magnitude of the early-2013 price increase and the spike in rates midway through the year, this is perhaps understandable.  Months of inventory have increased back to the levels that prevailed for most of 2012; this is a big change in percent terms but supply still remains scarce, historically speaking.

I hope everyone has a fantastic 2014!




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September-October 2013 Housing Data Rodeo

Submitted by Rich Toscano on November 23, 2013 - 3:24pm

Folks, sorry this has taken me so long.  When urbanrealtor starts offering to buy me booze just to get the monthly charts up, I know I've been a huge slacker even by my own lofty standards of indolence. 

So without further delay, let's do this.  Starting with the median price/square foot, we see that the rapid price apprecation we've seen all year finally took a breather over the past couple months, with prices by this measure flattening in September and then falling in October.



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August 2013 Housing Data Rodeo

Submitted by Rich Toscano on September 15, 2013 - 5:26pm
As I mentioned last in last month's rodeo, the full effect (whatever that may be) of the recent rate increase won't show up until the September data.  Thus, the August data presented below is kind of a transitional phase... higher rates will have affected some of these sales but not all.

With that said, home prices continued to climb:



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July 2013 Housing Data Rodeo

Submitted by Rich Toscano on August 20, 2013 - 6:00pm
Prices increased last month, but at a slower pace than the springtime frenzy:



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May-June 2013 Data Rodeo -- Price Explosion

Submitted by Rich Toscano on July 14, 2013 - 4:56pm
This chart of the Case-Shiller index (with my estimate based on median price per square foot over the last two months) shows just how different the character of this year has been:



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Monthly Payment Ratios, May 2013: Homes May Not Be Cheap, But Mortgages Sure Are

Submitted by Rich Toscano on May 24, 2013 - 9:48am

I recently updated the price-to-income and price-to rent-ratios for San Diego single family homes.  I think these are the best metrics to determine whether homes are overpriced or underpriced based on their fundamental economic underpinnings.

It's also interesting to look at the ratio of monthly payments to incomes rents, but for a different reason.  I'll get into this in a moment, but first let's check out the graphs:



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Shambling Towards Affordability: May 2013

Submitted by Rich Toscano on May 22, 2013 - 5:24pm

With recent robust price increases has come a resurgence of talk about a bubble.  Whether a given investment is in a bubble or not may depend on many factors, but in my mind, the most important of these is valuations.  If valuations (properly measured) do not show the asset to be extremely overvalued, then you probably aren't dealing with a bubble.  This is not to say the asset can't go down in price -- not at all.  It's just to say that it's not a proper "bubble."

So what are valuations telling us about the state of the San Diego housing market right now?  Let's have a look at the two most important ratios that have guided us through this boom and bust: the home price to income ratio, and the home price to rent ratio.  These ratios compare home prices with two real-world fundamental underpinnings: how much potential home buyers earn, and how much it costs to rent (put another way, how much it costs to not buy).  Over time they have tended to "mean revert" around a middle of the road value which we can roughly say represents the fair value for San Diego housing.

Let's start with the price-to-income ratio:



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April 2013 Data Rodeo: Rock-Bottom Inventory and Rising Prices, Again

Submitted by Rich Toscano on May 16, 2013 - 4:38pm

April saw a continuation of what we saw in March: fairly strong demand, ridiculously constrained supply, and rising prices.

Starting with the latter, the median price per square foot for single family homes rose 2.6% last month.  That makes for a year-over-year increase of 19.5%!  The condo price/sqft was actually down for the month, but that doesn't mean much considering last month's moonshot.  I tend to ignore the condo series due to its volatility, but for what it's worth, the median condo price/sqft is up 26.9% since last year, and the detached/condo aggregate figure is up 21.3%.



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March Data Rodeo -- Housing Market Smoking Hot

Submitted by Rich Toscano on April 21, 2013 - 7:06pm

Sorry if the title sounds hyperbolic, but... wow, it's true.  As of March, the market was blazing (to continue with the heat-related metaphors).

Let's start with this graph of the median price per square foot since the 2009 trough:



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February 2013 Resale Data Rodeo (Graphs Only)

Submitted by Rich Toscano on March 23, 2013 - 5:19pm





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The Year in Home Prices, According to Case-Shiller

Submitted by Rich Toscano on March 5, 2013 - 5:47pm
Let's have a look at how the year 2012 treated house prices, as measured by the Case-Shiller index.

This home price indicator lags by a couple months, but it offers a couple advantages. First, it uses repeat sales of the same homes, so it is more accurate than simply looking at a median price, which could be distorted by a change in the quality of homes sold.

Second, it breaks the sold homes into three price tiers, which allows us to separately analyze price changes for low-, medium- and high-priced homes. (The tier cutoffs are determined by simply splitting the sold homes into three equal-sized groups — the most expensive one-third of homes sold goes into the high-priced tier, etc.).

Here is the Case-Shiller index, for the three tiers as well as the combined index in black, starting at the early-2009 price trough:



continue reading at voiceofsandiego.org

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