Not only do we expect higher, but now much higher readings from the monthly Case-Shiller index. The consensus expected +9.0% nationally, and it came in at +9.3% for the 20-city composite – the biggest gain since May 2006.
“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.
“It is very strong, it’s a solid rebound, but I would not call it a bubble,” said Blitzer about housing.
San Diego’s Case-Shiller index topped the national composite, with +10% improvements both the seasonally-adjusted, and non-seasonally adjusted readings.
This is the 13th month in a row that we’ve seen gains, which means the Y-O-Y readings will be on top of a previous gain as well. But we should see more eye-popping results in the next couple of months – probably higher than 10% increases year-over-year.
For example, here are the SD monthly average $/sf:
| Month | 2012 Avg | 2013 Avg | Difference |
| March | |||
| April |
By the time we see the Case-Shiller March and April readings, will buyer exhaustion be setting in? If so, more double-digit gains may cause them to surrender, especially when they see it tacked on to already-frothy list prices.
I fear that after this summer, you’re blog will be appropriately named again….
Do you notice how Blitzer and all of these guys won’t say we’re getting over-heated or the market is moving too fast?
Nobody is saying it – in fact, they say the opposite.
So I’ll say it – prices are moving too fast and while buyers probably can keep up as long as rates are low, they don’t WANT to keep up. Watch for burnout ahead as sellers think the sky is the limit.
I would say ” New House Bubble” for current house market. This doesn’t look natural. What about economy? Do you really think economy is recovered confidently?
Yea… I guess Stock and House market only…
New house bubble will be under control sooner or later.
Black money from overseas (China and India…etc) will be decreased. This is one of major effects for house bubble… they are cash buyers…
Wall Street? whenever they think they have enough margin from house investment, they will withdraw from house investment.
so pls be careful of buying house at this moment.
If you are rich… go ahead…
The real question is (in my mind anyway)….
WHEN WILL THE BUILDERS BUILD AGAIN ?
Sellers I think have proven they don’t need to sell for the most part, so at this point I think it is in the builders hands.
If you are rich… go ahead…
Yes, the regular folks are on the sidelines, and this market is for rich people….for now.
Hello Jiji!
I think the builders are done – from what Bill Davidson said, there aren’t any big parcels left to develop.
Otay still has land, and the I-15 corridor between Escondido and Temecula is ripe – with big projects in the works. But I think most people will pay more to be closer to town.
Water cooler talk is that we are in a bubble and why are prices so high – as long as there are average folk talking like that housing will climb the wall of worry. Just like last time, when water cooler talk starts sayin’ housing will go to the moon is when the shtako hits the fan.
re:no more big projects
Where San Diego County can we put more high risers?
“I think most people will pay more to be closer to town.”
Yep and closer to coast is always going to go for a premium as well.
I guess for regular folks they will have to look at little further inland and farther from town (or buy a condo or rent).
I down see a big pop coming myself and inland is still a lot cheaper than the coast (has not recovered near as much ground IMO).
I don’t see the bubble popping without the economy in general popping (then no one will be happy).
Well there you go.
Hello John! 😉
I think we’ll see more like this, a 2,200-unit all-inclusive complex:
http://www.utsandiego.com/news/2013/jan/25/mira-mesa-apartments-garden-communities/
With an average rent of $1,737.50 per month, the gross rents are over $3.8 million per month. There will be older properties torn down to build these!
http://cmvliving.com/The-Community/The-Aerial-View.aspx
“Designed as a condo complex but intended to remain as rentals, the units include balconies or patios; Amana and Whirlpool appliances (including full-size washers and dryers); and double-paned windows to silence the freeway noise.”
•Bowling alley, pools, spas and “Visions” fitness center
•Miniature SGF-Visa Mississippi train on 100 feet of track and a 15-animal Chance carousel for the kids
•Karaoke equipment and “concert stage” for would-be lounge lizards
•Plugin outlets for electric cars and photovoltaic cells on the garage roof to power the common area facilities
•Shuttle service to area destinations
•WiFi at the recreation center and “smart box” in the units to control the electronics for the “iGeneration”
•Minimart, dry cleaner’s, nail and hair salon and other retail outlets
•A one-acre community coop garden where residents can grow their own vegetables
Something looks broken, what happened in the last 6 months to people’s income or the economy to make this possible?
You’d think higher prices would shake more inventory loose…
Something looks broken, what happened in the last 6 months to people’s income or the economy to make this possible?
Nothing, and that is the proof that it’s a rich man’s game now.
Apparently there are plenty of people either gainfully employed, or full of money because general stats on the economy don’t reflect that much improvement.
I’d encourage you to consider this the new abnormal, rather than something is broke. We’re already back to peak pricing in many parts of NSDCC.
The seller of Durango paid $525,000 in May, 2008 – it closed yesterday for $625,000, and that’s in regular Carlsbad.
All the weak handed ’03-’07 buyers have either been foreclosed on with their cribs being dribbled back by the banks, or are still flogging free rent. No significant inventory to be had there. All buyers of the last four years are strong handed elective sellers who may or may not sell. Not much meat on the bone there either.
This price action is obviously unsustainable, but where it stabilizes – nobody knows.
“The New Abnormal” fer sure.