Case-Shiller from 3 months into the future

Friday, August 22, 2008


This is an attempt to predict the dynamics of the real estate market in San Diego over the next 3-4 years.

"Fundamentals" curve assumes more or less unchanged interest rates and steady wage inflation that averages 3%/year going forward. For the top tier I use a soft-landing scenario (exponential decay to fundamentals). To extrapolate two other tiers, I use quadratic approximations of season-adjusted HPI points from the last 9 months.

Summary of predictions:

* Aggregate Case-Shiller bottom in February '09 in 150-155 range (late '02 pricing)
* Top tier: 5% decline followed by many years of scraping along the bottom
* Middle tier: 6-8% decline followed by a mild bounce-back


* Bottom tier may get some support from FHA short-refinancing program, in which case the decline will not be so severe.
* I'm assuming that GSE conforming-jumbo loans and higher FHA loan limits stay with us until the return of a healthy jumbo market. Technically, they are supposed to be discontinued on Dec 31, 2008, but it's likely that loan limits will be extended.
* Interest rates may not stay the same. Here are two alternative scenarios, with rates heading to 5.5% and 7.5% long term, respectively:

I'm not a prophet and I may be seriously off, only time will tell.

UPDATE: recalculated the "fundamentals" curve using actual CPI and mortgage rate data.

Tuesday, August 5, 2008

Prices by zip code: 2008 vs 2002

Approximate median values of detached homes in each community in Q2 2008, and how much they were worth in Q3 2002.

RankAreaDefinitionMedian priceMedian price - Q3/02Rank - Q3/02Change
1Logan Heights92113$186,000$195,0001-5%
4Golden Hill92102$253,000$263,0005-4%
5National City91950$263,000$234,000312%
6Vista NW92083$267,000$267,00070%
7Lemon Grove91945$281,000$273,00083%
8Escondido E92027$289,000$282,000102%
9Spring Valley91977,91978$290,000$278,00094%
10Escondido SE (valley)92025$290,000$283,000112%
11Paradise Hills92139$290,000$267,00069%
12Oceanside NE92057$318,000$289,0001210%
14San Ysidro92173$331,000$303,000189%
15Escondido N92026$332,000$306,000208%
16Chula Vista SW91911$334,000$298,0001612%
17El Cajon E92021$335,000$299,0001712%
18NE Vista92084$337,000$327,000273%
19Otay Mesa92154$347,000$298,0001516%
20El Cajon W92020$348,000$295,0001318%
21Oceanside SE92056$354,000$304,0001916%
22Imperial Beach91932$360,000$319,0002313%
23La Mesa91941,91942$360,000$318,0002213%
24Chula Vista NW91910$374,000$340,0003110%
26Linda Vista92111$378,000$345,0003210%
27San Marcos N92069$382,000$337,0003013%
29Rancho San Diego92019$386,000$354,000369%
30Mira Mesa92126$389,000$328,0002819%
31W Oceanside92054$392,000$317,0002124%
32San Carlos92119$394,000$346,0003314%
33Serra Mesa92123$399,000$324,0002623%
35Eastlake, Otay Ranch91913,91915$416,000$356,0003717%
36Vista S92081$417,000$328,0002927%
40San Marcos S (except San Elijo Hills)92078$455,000$369,0003923%
41Valley Center92082$457,000$407,0004512%
42Normal Heights92116$457,000$379,0004221%
43Eastlake NE91914$482,000$409,0004618%
44Allied Gardens, Del Cerro92120$485,000$375,0004129%
45South Park92104$491,000$365,0003835%
46SW Escondido92029$495,000$417,0004819%
49Rancho Bernardo92127$528,000$394,0004334%
51Carlsbad NE92010$547,000$420,0005030%
53Carmel Mtn Ranch92128$571,000$433,0005232%
54San Elijo Hills92078$592,000$452,0005431%
55Bay Park92110$593,000$464,0005528%
56Escondido SE (hills)92025$644,000$504,0005928%
57Carlsbad NW92008$666,000$485,0005737%
58Scripps Ranch92131$676,000$520,0006030%
59University City92122$677,000$474,0005643%
60Ocean Beach92107$681,000$496,0005837%
61Hillcrest, Mission Hills92103$735,000$559,0006431%
62Carlsbad SE92009$743,000$527,0006141%
63Carlsbad SW92011$760,000$551,0006338%
64Pacific Beach92109$795,000$563,0006541%
664S Ranch92127$838,000$582,0006744%
67Point Loma92106$875,000$616,0006842%
69Carmel Valley92130$982,000$690,0006942%
70Del Mar, Solana Beach92014,92075$1,393,000$912,0007053%
71La Jolla92037$1,698,000$1,119,0007252%
73Rancho Santa Fe92067,92091$2,506,000$1,932,0007330%

Friday, August 1, 2008

San Diego HPI - July '08

City average: 33.8% off the peak
Top tier: 13.3% off the peak
Middle tier: 34.2% off the peak
Bottom tier: 42.6% off the peak

Steady decline continues. Top tier remains resilient, but the spring bounce is clearly over. 54-94 geo is getting close to breaking the 50% off the peak.

Two lowest-priced geos ("54-94" and "north of 78") are back to mid-'02 prices. If this trend persists, we'll see 2001 prices before the end of the year.

These charts include all June closing late-reporters. Apparent stabilization in several neighborhoods in June charts was a statistical fluke.