San Diego Case-Shiller Index, Nov

Comparing to the dreadful end of 2018 doesn’t tell us much, but at least we had a positive move between October and November – we’re almost back to where we were in September!

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%
Sep
263.26
0%
+2.8%
Oct
262.56
-0.2%
+2.7%
Nov
263.18
+0.2%
+3.9%

There were times that our index was going up 1% per month, and now it’s around +1% per quarter which is a good pace for buyers – it’s not going up fast enough for them to feel they need to grab something quickly.

Has Housing Peaked?

An excerpt from Bill’s post today:

Since this post (in July, 2018), existing home sales have mostly moved sideways, and both new home sales and single family starts have hit new cycle highs.

Here is the graph I like to use to track tops and bottoms for housing activity. This is a graph of Single family housing starts, New Home Sales, and  Residential Investment (RI) as a percent of GDP.

The arrows point to some of the earlier peaks and troughs for these three measures.

The purpose of this graph is to show that these three indicators generally reach peaks and troughs together. Note that Residential Investment is quarterly and single-family starts and new home sales are monthly.

RI as a percent of GDP has been sluggish recently, mostly due to softness in multi-family residential.   However, both single family starts and new home sales have set new cycle highs this year.

Also, look at the relatively low level of RI as a percent of GDP, new home sales and single family starts compared to previous peaks.

To have a significant downturn from these levels would be surprising.

Link to Bill’s post

San Diego Case-Shiller Index, Oct.

Above is the non-seasonally-adjusted San Diego Case-Shiller Index for the last ten years.

We had slight drop in the October index (the lower mortgage rates have kept us about even with last year) but in this decade we had a 64% increase!

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%
Sep
263.26
0%
+2.8%
Oct
262.56
-0.2%
+2.7%

Will our index go up another 64% in the coming decade? Probably.

If it only goes up HALF of what it did this decade, it would be a win!

San Diego Case-Shiller Index, Sept

Our index stayed flat, which is better than last year!

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%
Sep
263.26
0%
+2.8%

Will we have a slight descent for the next few months, and send our index back into the 250s?  If so, 2020 will probably look a lot like 2018 and 2019, price-wise.

San Diego Case-Shiller Index, August

Mortgage rates have been 1% lower than they were a year ago, yet sales are flat….and so are prices. We had a 2.3% improvement year-over-year, which is actually the best percentage improvement in 2019.  But look at how our Y-o-Y changes have pancaked this year, compared to 2018:

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%

This latest month-over-month reading did go negative again, just like it did in August of last year.  Will we have six consecutive months of negative readings in 2019, and send our index back into the 250s?  If so, 2020 will probably look a lot like 2018 and 2019, price-wise.

San Diego Case-Shiller Index, July 2019

Yesterday, Yunnie said that he sees no sign of buyer optimism fading, to which I said ‘just wait for the Case-Shiller Index (which should be the strongest of the year)’.

CNBC posted the click bait above, which is shocking because they are usually so negative about real estate – then published the key points below:

Mortgage rates dropped back into the threes at the end of May, yet the national index didn’t change between June and July?  Every other time buyers could get a mortgage rate that started with a 3, they’ve come running.  But not this time – home prices are stalled year-over-year, and existing home sales in the West declined 3.4% in August.

But never fear, our head cheerleader won’t let that get in the way:

Lawrence Yun, NAR’s chief economist said, “As expected, buyers are finding it hard to resist the current rates,” he said. “The desire to take advantage of these promising conditions is leading more buyers to the market.”

What he should say is that sellers should be sharpening their price. You’re on our side Yunnie, help us out!

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.01
+1.0%
+1.1%
June
261.77
+0.7%
+1.3%
July
263.58
+0.7%
+2.0%

The index is a three-month weighted average, so July closings should reflect the environment where mortgage rates were 3-something for the buyers.  But they aren’t willing to pay 1% more than in June?

Looks like a sign of buyer optimism fading to me.

San Diego Bubble vs. Other Cities

Our Case-Shiller Index did set a new record yesterday, but our Housing Bubble 2 is relatively tame – just 4% above the previous peak of 250.34 in November, 2005.

Compare to others like Seattle (+33% over last peak), San Francisco (+41%), and Denver (+59%) here:

https://wolfstreet.com/2019/08/27/the-most-splendid-house-price-bubbles-in-america-august-update-western-markets-see-the-dip/

San Diego Case-Shiller Index, May

We had a solid 1% increase in our local index M-o-M, and it was about the same year-over-year:

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.44
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.17
+1.0%
+1.2%

From cnbc on today’s Pending-Home-Sales increase of 2.8% nationally:

“If mortgage rates remain near recent lows, we could see prices pick back up as a result of improved affordability as well as the possibility of more limited inventory available,” said Danielle Hale, chief economist for Realtor.com.

The supply of homes for sale had been rising for much of this year but flattened in June. Some are predicting inventory will be lower again this fall. That is causing more competition in the market.

“Homes are selling at a breakneck pace, in less than a month, on average, for existing homes and three months for newly constructed homes,” said Yun. “Homeowners’ equity in real estate has doubled over the past six years to now nearly $16 trillion. But the number of potential buyers exceeds the number of homes available. We need to see sizable growth in inventory, particularly of entry-level homes, to assure wider access to homeownership.”

Regionally, the Realtors’ pending home sales index rose 2.7% in the Northeast month-to-month and was 0.9% higher than a year ago. In the Midwest, the index grew 3.3% monthly and 1.7% annually. In the South, the index increased 1.3% monthly and 1.4% annually. In the West, pending sales jumped 5.4% monthly and were 2.5% higher than a year ago.

San Diego Case-Shiller Index, April

Yesterday’s Zillow index showed San Diego’s pricing to be fairly flat, and now April’s Case-Shiller Index has a similar-sounding +0.8% increase year-over-year.

We’ve bounced back from six months of negative readings, just to get back to where we were last year – and we’re still not as high as the June and July 2018 readings:

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.66
+0.9%
+1.1%
Mar
256.39
+1.2%
+1.3%
Apr
257.68
+0.5%
+0.8%

The high-tier index is similar with just a +0.5% increase over last April, and not as high as June, 2018:

From cnbc:

San Diego Case-Shiller Index, March

I calculated the monthly increase incorrectly last month – it’s right now, and it shows that the index has picked up steam lately. But we’re still slightly below last year’s peak of 258 in June & July:

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
February
250.91
+1.1%
+7.5%
March
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.63
+1.2%
+1.3%

The index is 3.4% higher than it was at the beginning of 2018, but it could be worse.

This NYC broker says homeowners in Manhattan can figure what their home was worth in May, 2018, and then subtract 10% to find today’s value – yikes!

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