San Diego Housing Market News and Analysis

After taking a breather in July, the median price per square foot rose again in August:

Dear Piggs --

The site will be down for a while tomorrow afternoon so that I can move it to a new server. I'm not sure exactly when or for how long, so this warning is slightly useless, but better than nothing I guess.

Apologies for any unintended boost in productivity this may cause.

Rich

UPDATE

OK, the move is all complete. If anyone has any troubles with the site, please email me at rich @ pigg or PM me.

I wish to thank user afx114 for all the help on this. In addition to being a longtime loyal pigg, afx owns a hosting company called bit-box, which I am very happy to have as the new host for piggington and my other sites too. The guys at bit-box run a tight ship, their customer service is amazing, and the prices are very reasonable. If you are looking for a hosting provider, check them out.

After a pretty steady rise for the year to this point, home prices (as measured by the median price per square foot) largely flattened out in July:

It was more of the same last month, as months of inventory remained very low:

The recent increase in San Diego home prices has begun to show up in the (always lagging) Case-Shiller index. 

Between January, the month for which I last updated the C-S data, and April, the aggregate San Diego home price index has risen by 2.0 percent.  This increase was enjoyed entirely by the high- and mid-priced tiers, up 2.4 percent and 2.5 percent respectively.  The low tier actually declined by .7 percent, although that entire decline took place in February and the low tier has risen since then.


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Apologies for the tardiness of this month's rodeo.

I'll start with the chart I've been watching most closely -- months of inventory (inverted) in blue, and annualized monthly price change in red:


Months of inventory is now at the lowest level in many years, and as foreshadowed by the above graph, prices have been on the rise.

Inventory has remained super tight, and as the historical relationship depicted in the following chart would have predicted, prices have been on the rise:

My company, Pacific Capital Associates, has recently completed the third-party examination of our investment track record for 2011.  (For background on this, see my inaugural explanation of these annual performance updates).  Here it is, in chart form... you can click on the chart for more detail and loads of fun disclosures:

Due to time constraints I am going to do a graph-only version of the rodeo this month.  Except for this part, I guess. 

I will quickly note the following:

1. The median price per square foot did rise last month, as the low months-of-inventory figure suggested might happen
   
2. Months of inventory (final graph) is 30% lower than last year, and the lowest it's been in at least 6 years (as far back as my data goes for this series)
3. If the typical historical relationship between months of inventory and prices is still in place, inventory at these levels strongly suggests near term price rises
4. Housing bears please note the use of the phrase "near term" before flaming me in the comments
   

I've often discussed how the three industries that I refer to as the "housing bubble beneficiary sectors" took the brunt of the recessionary job losses.  In this post, I have updated some graphs showing the enormous degree to which this is the case.

The bubble beneficiary sectors, so named because they grew like weeds as a result of the housing boom, are: construction, finance (which includes real estate transactions), and retail (not directly related to housing like the other two, but a bubble beneficiary nonetheless as a result of vigorous home equity-financed consumer spending).  In the graphs below, I have grouped these three sectors together as the "Housing Bubble Sectors" and charted the change in their size alongside that of the non-bubble private sector industries and government.

I took these graphs all the way back to the beginning of 2007 because the bubble sectors started to deflate alongside the housing bubble even before the recession officially began in December of that year.  In order to avoid seasonality problems, I started and ended the graphs on the same month (January 2007 through January 2012).

This first graph shows the number of jobs lost in each of these three categories:


continue reading at voiceofsandiego.org

According to the Employment Development Department latest estimates, seasonally-adjusted employment in San Diego is estimated to have dropped between December and January, and then to have rebounded somewhat February:


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The Case-Shiller index of San Diego home prices declined once again in January, falling by 1.6 percent for the high-priced tier, 1.0 percent for the mid-priced tier, and .2 percent for the low-priced tier.  (The tiers represent, respectively, the top, middle, and bottom one-third of homes sold by price).  The overall San Diego index fell by 1.1 percent.

As the following graph shows that the middle and high tiers are now below the post-bubble low points they hit in early 2009.  (I guess that means I should remove the word "2009 trough" from these graphs).


continue reading at voiceofsandiego.org

The median price per square foot was mixed last month, with single family homes up 2.0% but condos walloped for 4.3%.  In aggregate, prices by this measure were mildly up simply because a lot more single family homes than condos sell each month.  In any case, the single family series tends to be smoother and a more reliable indicator of what's really going on, so I'd say February was a mild win (or at least a tie) for prices:

The Case-Shiller index of San Diego home prices declined across the board in December:


continue reading at voiceofsandiego.org