After sputtering over the last three months, the latest reading of the SD Case-Shiller Index showed some pop – like it did last January:
San Diego Non-Seasonally-Adjusted CSI changes:
| January ’17 | |||
| February | |||
| March | |||
| April | |||
| May | |||
| June | |||
| Jul | |||
| Aug | |||
| Sept | |||
| Oct | |||
| Nov | |||
| Dec | |||
| January ’18 |
The highest reading of the San Diego NSA CSI was 250.34 in November, 2005.
U.S. home prices posted another big gain in January, pushed higher by a shortage of homes for sale. Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index climbed 6.2 percent in January from a year earlier. That nearly matches December’s 6.3 percent gain, which had been the fastest 12-month growth in almost three years. The January increase was in line with economists’ expectations.
“The home price surge continues,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
No sign of running out of buyers. There may be fewer buyers but there is certainly less inventory. It’s all about the ratio.
I’m not as worried this time. Last time crack shacks were selling for new highs. This time it is quality that is contributing some of the price premium.
Example. I am steeling to spend a “Lexus” on the kitchen. The math says it adds a “Bentley” to the home value. I get to cook in a high end kitchen and eventually get paid well for the privilege.
You might be interested in a “Thomas Fire” lot listing:
http://exurbannation.blogspot.com/2018/03/fire-replacement.html
I’m not as worried this time.
Me neither. When mortgage payments are optional, there is much less concern about market failure.
But the HUD will get left holding the reverse-mortgage bag if values decline again.
People might think that because we had a major event in 2008, we all learned a lesson about home-value volatility and buying smart. But there are some very dumb decisions being made these days by amateur buyers and their incompetent agents.
” But there are some very dumb decisions being made these days by amateur buyers and their incompetent agents.”
Enquiring minds want to know…..
Enquiring minds want to know…..
Just one thing to avoid – paying retail for fixers.
Take Olde Carlsbad for example. It’s bad enough that 70% to 90% of the neighbors paid less than $300,000 for their houses, and today’s buyer has to pay $900,000+. But if you buy a fixer too, then you have another 5% to 10% to invest, plus the time and aggravation. Bad Thing #1.
Bad Thing #2 is if the market got soft, any of the neighbors could sell for $800,000 and make out great. If you only paid in the $900,000s for a turn-key special home, at least the spread doesn’t feel as bad as if you’re were into it for $1,000,000+ plus bad memories of the project difficulty.
You are buried in that home, and could take another cycle just to recoup the investment. Oh, you never plan to sell? OK, no problem – but if something changed, at least the turn-key home sale at a lower price point would be easier to digest.
Another thing to avoid. Paying retail plus for bad flips. This is a very hard thing to detect for most people even many agents. I have a few indicators but they are neither universal nor always correct. Coastal property using particle board anywhere would be good thing to look for.
Rob Dawg hit a big nail on the head. The materials and craftsmanship of many flips might last 5 years before they fall apart… Pity to see when they demo those pink and peach bathrooms that have been bullet proof for 50 years to replace it with crap that won’t last much past close of escrow.
“Rob Dawg hit a big nail on the head. The materials and craftsmanship of many flips might last 5 years before they fall apart…”
“Zombie Houses.” They seem normal, if you don’t look too hard, and they exist by savagely eating your wallet, while ignoring your mournful screams.