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Home prices in all 20 major metro areas decreased from September to October, according to Standard & Poor's/Case-Shiller data released this morning (Dec. 28). "The double dip is almost here," says S&P economist David Blitzer. "There is no good news in the October report. Home prices across the country continue to fall....tax incentives are over." San Diego home values declined 1.5% between September and October -- worse than the 1% decline from August through September. However, San Diego prices have risen 3% on a year-over-year basis, one of only four metro areas to experience a gain. The others are Los Angeles, San Francisco, and Washington DC. San Diego values are now down 36.1% from their November 2005 peak.

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Comments

SurfPuppy619 Dec. 28, 2010 @ 8:20 a.m.

Home pricing and sales are directly related to the job market. No jobs = lower home prices, less home sales.

Simple math and economics.

We have basically turned into a banana republlic, and homes sales are just another factor proving that fact up.

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Don Bauder Dec. 28, 2010 @ 2:16 p.m.

The housing market in the U.S. and in San Diego appears doomed to a double-dip. The stimulus program is over, foreclosures and short sales mount, mortgage rates are going up, the employment picture remains very gloomy. Best, Don Bauder

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Founder Dec. 28, 2010 @ 9:11 a.m.

If the Ultra Wealthy now own most of the US, then it stands to reason that house prices will fall into the toilet as most regular folks will not be able to afford to buy them.

We are becoming a nation of Renters, that cannot afford the American Dream (of owning their own house) and this will change the social-economic fabric of our Country; as our once strong Middle Class fades into the history books... + I expect to see both the cost of utilities and energy increase as the Dollar drops which together will make just getting bye much harder in the future.

We may be helping prevent radicals gain access to WMD in Afghanistan and other places around the World, but we are forcing most of own citizens to go broke paying for it.

Many of US remember the famous peace marches of the Sixty's.

Prepare for the Un-Peaceful Marches of the "TEEN's" (2011-2019).

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Don Bauder Dec. 28, 2010 @ 2:20 p.m.

The very wealthy control the overwhelming percentage of financial assets, but not residential assets. But you are right: by necessity, rentals are going up as home ownership declines. Wealth and income maldistribution gets worse every day. Will we storm the Bastille? I doubt it. Not now. But I could be wrong. Best, Don Bauder

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MondoGrapes Dec. 30, 2010 @ 7:54 a.m.

I keep asking myself what it will take to finally get the peasants to a storm the Bastille kind of moment. I think it'll be one of two things: either the cable TV goes out and the food stamp cards stop working; or the coming tax burden on those in the middle class who still have jobs and property will become so crushing that they finally say "Enough!"

I always hear a lot of criticism of those "effete" and spoiled Europeans, but I'll definitely give them this: they haven't been taking this crap lying down like vast majority of Americans.

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SurfPuppy619 Dec. 30, 2010 @ 9:34 a.m.

I always hear a lot of criticism of those "effete" and spoiled Europeans, but I'll definitely give them this: they haven't been taking this crap lying down like vast majority of Americans.

======================== We have not seent his yet but we will, unfortunately it will be a revolt by public employees when they will be forced to take pay and pension haircuts I'm afraid-instaed of from the working poor and what is left of the middle class.

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johnsd Dec. 28, 2010 @ 11:24 p.m.

The cost of utilities will probably go up and our state and federal governments continue to till at windmills, which are a cuisinart for birds of prey and cost much more than hydro, nuclear and carbon-based energy sources. Virtually nothing is done to develop and exploit cost-effective domestic sources of energy. The cost of energy not only impacts what we pay as consumers, but also impacts manufacturing and other energy intensive economic activities. The more expensive government makes things through regulations and bureaucratic dictates, the less productive economic activity we will have. But will have more well-paid bureaucrats.

Housing is relatively affordable in most of the country with the exception of the west coast and the northeast. Here in coastal California, real estate prices are still high in relation to income and have been since the mid-seventies. Far too many people see housing as the lottery instead of as shelter and security for tough times. However, it is very sad to see people lose their houses and the devastation caused in areas where prices have dropped by 50% or more. As the mindset towards home ownership changes from potential appreciation to long-term affordability, prices are not likely to increase for a while.

Rents in San Diego are very high in absolute terms. However, in relation to the underlying value of the property, they are not that high.

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SurfPuppy619 Dec. 29, 2010 @ 6:24 a.m.

Rents in San Diego are very high in absolute terms. However, in relation to the underlying value of the property, they are not that high.

==================== Housing in San Diego is sky high in both absolute and relative terms, it is called the sunshine tax.

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Founder Dec. 29, 2010 @ 7:38 a.m.

The Sunshine Tax is the only one I don't mind paying!

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Don Bauder Dec. 29, 2010 @ 1:50 p.m.

The sunshine tax, or psychic income, does bother some people. More move out of San Diego than move in. Best, Don Bauder

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Don Bauder Dec. 29, 2010 @ 1:49 p.m.

San Diego's cost-of-living is one of the highest in the nation, but the level of personal income is only moderately above the national norm. It's a squeeze. Best, Don Bauder

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Don Bauder Dec. 29, 2010 @ 1:47 p.m.

There are many angles to the cost of fuel. Think, for example, of the many states in the colder half of the U.S. whose citizens enjoy fresh fruit, grapes, vegetables, etc. in the winter. Those items have to be shipped from South America. Will higher-priced fuel make this convenience uneconomical? That's just one of many points to ponder. Best, Don Bauder

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johnsd Dec. 29, 2010 @ 12:32 a.m.

Here are a couple of recent columns from Victor Davis Hanson.

A positive one: "Every Man a King" http://www.victorhanson.com/articles/hanson122810.html

One not so positive: "Two Californias" http://www.victorhanson.com/articles/hanson121610.html

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SurfPuppy619 Dec. 29, 2010 @ 12:14 p.m.

A positive one: "Every Man a King" . http://www.victorhanson.com/articles/hanson122810.html .

"Yet this Christmas we should all at least give ourselves some credit. In the last three decades, the United States — through technological breakthroughs, improved worker productivity and the importation of globalized production from abroad — has achieved a level of material prosperity for its 300 million citizens unmatched at any time in the history of civilization."

I do not agree with this at all. Every American is at an UNMATCHED level of prosperity??? Please, there are literally millions of people who are homeless in the USA today-that was unheard of even 30 years ago.

.

.

One not so positive: "Two Californias" . http://www.victorhanson.com/articles/hanson121610.html . ===============================

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Don Bauder Dec. 29, 2010 @ 1:55 p.m.

I agree with you, SP. One can't say that 300 million Americans are well off. An entirely too large group is anything but well off. Best, Don Bauder

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MondoGrapes Dec. 29, 2010 @ 8:02 p.m.

Too large a number indeed. And I would argue that whatever prosperity was enjoyed was illusory anyway. It was all purchased with borrowed money.

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johnsd Dec. 30, 2010 @ 1:53 p.m.

I interpret the 300 million as a generic term for the entire population and not that every single individual is doing well. I every civilization there has always been individuals who are not doing well, regardless of how affluent, or impoverished, the civilization. That has been true, is true today and will probably always will be true.

When you look at the technical/material advances that make life more enjoyable today and the cost reductions facilitated by Moore's Law, life is better today. In the "Two Californias" article Mr. Hanson observes that most of the people who are using food stamps have similar cars and electronic devices as the middle class in other parts of California.

That is not to say that many people are hurting today. The economic changes, the fraudulent lending practices, cavalier/fraudulent securitization, the government encouraging home ownership by individuals who were not ready for it, greed and/or ignorance on the buyers part, etc. have created the housing mess. I personally know three individuals who may lose/walk away from their homes for different reasons. All of them are still employed and their salaries are about the same.

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Don Bauder Dec. 29, 2010 @ 1:52 p.m.

I don't even know who Victor Davis Hanson is. Should I? Best, Don Bauder

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johnsd Dec. 30, 2010 @ 2:28 p.m.

I like to read a variety of viewpoints. I enjoy reading your columns, even when I may not agree with them, because they provide a perspective that will hopefully make me a bit more knowledgeable. Your background in writing business columns for the UT and now at the Reader, where I believe you have greater freedom, have given you an insight into economic matters and how decisions are "made" that is informative.

Mr. Hanson's background in history, particularly in the classical civilizations of the Mediterranean, gives a perspective that much of what occurs today is really not "new" and has occurred before in a very different setting. Human nature has not changed much in several millennia. He continues to live in the farmhouse where he was born and has seen the drastic changes in California that are leading us to insolvency. He contrasts very well the vast differences between the liberal and affluent Palo Alto to the impoverished Central Valley and how people who are highly compensated doing intellectual work are often oblivious to others who produce things and are are not compensated well. I believe that the detachment from average people by our elites is what is leading us astray. Not everyone can be a highly-paid paper pusher, others--the majority really-- need to produce something. Decision makers need to be cognizant that real work does not occur in a utopian vacuum and they are not masters, or the new nobility.

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Ponzi Dec. 29, 2010 @ 1:56 p.m.

This is something that was sent to me from The Daily Reckoning...

"Fourteen percent of America's 56 million mortgages are already delinquent or in foreclosure. So if you multiply 56 million by 14%, that means that 7.8 million people right now are not paying their mortgages. 7.8 million homeowners have been delinquent for 30, 60 or 90 days...or are in foreclosure already. 91% of the people who are currently not paying are never going to get back to current, according to recent statistics. So that means that of 7.8 million people not paying their mortgage, 7.2 million are never going to get back. So that's a problem. 7.2 million homes. 7.2 million mortgages will go into foreclosure...eventually.

And the real story is even worse than the nearby chart suggests. Because of loan modification programs, the government, banks and servicers have dramatically slowed down the foreclosure process. The banks have been modifying everybody, slowing down the foreclosure pipeline and not taking properties onto their books.

So what this means is that the rate of NON-foreclosure on delinquent borrowers is climbing sharply, 24% of the people who have not made a mortgage payment during the last two years have still not been foreclosed on. That's how clogged the foreclosure pipeline is."

http://dailyreckoning.com/

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Founder Dec. 29, 2010 @ 2:52 p.m.

Great post and MAJOR cause for concern...

My rule of thumb is that all these types of numbers are off by a factor of two in the wrong direction; so I'm thinking about 20 Million people are now hearing the "suck", as they get close to the Mortgage Foreclosure Pipeline...

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Don Bauder Dec. 29, 2010 @ 8:42 p.m.

These foreclosures correlate with unemployment and particularly underemployment. But here is the Federal Reserve openly trying to pump up the stock market. But 80% of stock market wealth is concentrated with the upper 10%. The lower 80% has only 9% of stock market wealth. The Fed should wake up and realize that high unemployment is one of the major factors in the coming housing double-dip. Trouble is, high unemployment has become the new norm. Why? The Fed says it will give away money for almost nothing to banks as long as unemployment remains high. And the Fed is trying to bring long rates down (right now that is not working.) So Wall Street, the most powerful political force in the nation, has a stake in unemployment remaining high. Do you know who else has a stake in high unemployment? The Federal Reserve and the U.S. Treasury, that's who. If the economy actually started to grow rapidly, inflation would shoot through the roof because of all the excessive fiscal and monetary stimulus. So the decision makers want unemployment to remain high, too, so that the recovery will be exceedingly slow. Best, Don Bauder

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Founder Dec. 30, 2010 @ 2:02 p.m.

Maybe the US game plan is to out last the other industrialized Nations, so they go into deeper debt before the US does!

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Don Bauder Dec. 29, 2010 @ 8:35 p.m.

I think 25% of U.S. homes are under water. It may be higher. Best, Don Bauder

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SurfPuppy619 Dec. 29, 2010 @ 10:12 p.m.

The worst part of this mess were are in is the long lasting length of it.

This downturn started in September 2008, it is now January 2011-27 months!!!!.... and we are still 1-2 years away, MINIMUM, from even a modest recovery .

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Don Bauder Dec. 30, 2010 @ 7:46 a.m.

The downturn in the total economy started in the fourth quarter of 2007. Best, Don Bauder

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SurfPuppy619 Dec. 30, 2010 @ 12:26 p.m.

Thanks.

I know 9-2008 is when it hit the fan in public, I forgot when the actual downturn started, or was attibuted using negative growth.

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Don Bauder Dec. 30, 2010 @ 1:26 p.m.

The official arbiters on when a recession starts and ends put the last quarter of 2007 as the starting date. Best, Don Bauder

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Don Bauder Dec. 30, 2010 @ 9:37 p.m.

Excellent graphic presentation -- full of significant stats. Best, Don Bauder

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