~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…

May 2017 Housing Data: Quick Graph-Fest

Submitted by Rich Toscano on June 8, 2017 - 6:31pm
To sum up May: inventory rose, but sales rose more, resulting in even lower months-of-inventory. Despite that, single family home prices took a breather. But the price trend is still comfortably "up."

Further interpretation will be left as an exercise for the reader... ;-) Graphs below:

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Still No Housing Bubble in San Diego

Submitted by Rich Toscano on June 5, 2017 - 1:27pm
Bubble chatter has been on the rise, especially with the recent new all-time high in in the SD median (nominal) home price. In my latest article for Voice of San Diego, I make the case that San Diego housing exhibits neither the valuation nor the behavioral characteristics of a bubble:

There’s Still No San Diego Housing Bubble Yet

The article includes a chart that will be new to Piggs, showing the speed of price increases now vs. during the late-stage bubble.

(Remember, digital charts are most compelling if you print them out on paper and hold them up to a video camera -- the lower resolution, the better).

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April 2017 Housing Data: Prices Surge, Inventory Slightly Improves

Submitted by Rich Toscano on May 8, 2017 - 6:51pm
After a pullback in March, prices surged again last month.  The price per square foot for single family homes increased by 3.2% in April, bringing the year-to-date increase in that metric to 6.5%.

Here's how those prices look on a chart (note: I mostly ignore condos as they are much more volatile):

The next chart uses the 3-month average of the single family ppsf, to approximate where the Case-Shiller index will go:

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March 2017 Data Roundup: prices moderate, but inventory collapses to 2013 levels

Submitted by Rich Toscano on April 11, 2017 - 4:29pm
In last month's update, we saw an unusually large one-month jump in the price-per-square-foot metric, with single family homes up 4.5%. This month, prices by that measure pulled back by 1.4%, indicating that some of the increase was month-to-month noise. Still, when you combine the two months, it makes for a robust 3.0% increase in February and March together. By comparison, last year the single family ppsf rose by 1.7% over the same period.

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Toronto, apparently in some kind of time warp, has gone full mania

Submitted by Rich Toscano on April 10, 2017 - 9:51am

This really brought me back:


("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...

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February Housing Data: big jump in prices; inventory approaching early-2013 lows

Submitted by Rich Toscano on March 20, 2017 - 12:09pm
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:

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VOSD podcast: high prices vs. low payments, and is it a good time to buy?

Submitted by Rich Toscano on March 3, 2017 - 6:05pm
I went on the Voice of San Diego podcast to discuss my last couple of articles for them, including:
  • Why it's important to compare prices to incomes and rents, rather than looking at them in isolation
  • The duality of our market -- high prices but low monthly payments
  • The (lack of) historical relationship between rates and prices
  • Potenential changes to interest rates
  • Whether it's a good time to buy a home in San Diego
If this sounds interesting, you can listen to it here... hope everyone has a nice weekend!

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Valuation update (with bonus graphs!)

Submitted by Rich Toscano on March 1, 2017 - 12:11pm
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:
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:

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VOSD: Monthly Payments Low, Despite High Valuations -- But Rates Aren't a Big Driver of Home Prices

Submitted by Rich Toscano on February 28, 2017 - 7:06pm
I just put up a new piece at Voice of San Diego discussing the following:
  • Despite high home valuations, San Diego monthly payments (as compared to local rents and incomes) are on the low side of history
  • While it seems intuitive to believe that interest rates should be a big driver of home prices, this has historically not been the case. I posit several reasons why this might be.
Why High Home Prices Don’t Necessarily Mean High Home Payments

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January 2017 Housing Mini-Rodeo

Submitted by Rich Toscano on February 23, 2017 - 1:30pm
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.

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December 2016 Housing Data

Submitted by Rich Toscano on January 25, 2017 - 4:41pm
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:

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November 2016 Housing Data

Submitted by Rich Toscano on December 11, 2016 - 5:54pm
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:

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VOSD: Minus the Bubble, San Diego Homes Are at Their Most Expensive Ever

Submitted by Rich Toscano on October 12, 2016 - 9:23pm

I wrote a piece for voiceofsandiego.org, the intent of which was to introduce people to my preferred valuation approach (and to give a quick overview of where we are now). Probably not a whole lot new for longtime Piggs, but possibly of interest to newer readers.

Here's the synopsis:

A good approach to measuring the “expensiveness” of San Diego housing is to compare home prices with local rents and incomes, which together encompass the most important drivers of home prices. This shows homes to be unusually pricey right now, though nowhere near levels reached during the bubble.

And the link:

Minus the Bubble, San Diego Homes Are at Their Most Expensive Ever

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September 2016 Housing Data

Submitted by Rich Toscano on October 11, 2016 - 9:11pm
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:

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Valuation Preview

Submitted by Rich Toscano on September 25, 2016 - 9:45am
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:

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