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Is the housing bubble reinflating? With the Federal Reserve continuing to create money at a frenetic pace, one has to wonder. In February, U.S. home values rose 5.8%. Among the largest 30 markets, San Diego was 8th in year-over-year advance, up 13.9%, topped only by Phoenix (22.9%), San Francisco (18.6%), Las Vegas (18.1%), San Jose (17.1%), Sacramento (15.3%), Detroit (14.4%), and Riverside (14%). Detroit? Yes, but Detroit's median home value is $84,900. San Diego's is $385,800, topped only by Los Angeles, San Francisco, and San Jose. The West is booming despite its water problems, which mainstream media continue to play down.

Rents are also eye-opening. San Diego's monthly rents are $2,117, topped only by San Jose, San Francisco, and Los Angeles.

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Comments

Visduh March 21, 2013 @ 10:08 a.m.

We can only wonder what would be happening if the local unemployment rate was low, pay was rising, and the housing stock was all in superior condition. None of those things are the case, so who's bidding up the prices, and who's paying those sky-high rents?

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Don Bauder March 21, 2013 @ 12:49 p.m.

Visduh: Some speculators are the buyers, but data suggest they are not a high percentage. You are astute to look at major economic variables. When SD housing values peaked in late 2005/early 2006, the economy was booming. Unemployment was low, incomes good, basic industries healthy. None of that is true now. That's why I worry that another bubble is forming. At $385,800, current median values are well below the peak of $534,500. But the economy now is in much worse shape. We may be nearing a bubble relative to the shape of the economy. Best, Don Bauder

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tomjohnston March 21, 2013 @ 10:31 a.m.

Home prices are up year over year. But how do they compare with home prices from the 2005-2007 time frame, before the bubble began to burst? I think adding that data to your story would be helpful in giving a comparative look at how far back things have come since the bottom. For example, on the sales side, existing home sales hit a 3 yr high last month, to an annual rate of 4.98 million units. A three year high sounds great, but taken in context, maybe not so much when you consider that 6 yrs ago, March 2007, the annual rate was 6.68 million. Or going back just a little further, to mid 2005, the annual home sales rate hit what I believe was then a record sales rate of 7.33 million homes. As I said, I think it would be useful if you also provided the comparative data that would let us see where things stand in relation to conditions before housing tanked. BTW existing home sales in the west region are without question the worst in the nation, having risen less than 2% year over year, which is far, far worse than any other reason. So while prices are up, there are comparatively fewer homes moving at those higher prices here in the west, so I don't know so much about things booming in the west.

Just my opinion.

Opinions vary.

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Don Bauder March 21, 2013 @ 12:54 p.m.

tomjohnston: Good suggestion. Median home values peaked at $534,500 in early 2006, according to Zillow. In re West region existing home sales. Those data take in all the tiny towns around the West. The Zillow data I cited take in major Western metro markets such as LA, SF, SD, Vegas, Phoenix, etc. Best, Don Bauder

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tomjohnston March 21, 2013 @ 7:34 p.m.

Don Bauder, The data you used in your article was for home prices, not home sales figures. And while the sales data does "take in all the tiny towns around the West", it also takes all of the major metro areas, like here in Los Angeles, for example. I haven't looked seen data for Jan/Feb, but according to a report done by the W.P. Carey School of Business at ASU, in December, existing home sales in Phoenix metro fell by around 5%.. If you have metro area specific data on home sales, not home prices, please share it with us.

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Don Bauder March 21, 2013 @ 8:44 p.m.

tomjohnston: Yes, I don't have home sales figures at my fingertips. Best, Don Bauder

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Don Bauder March 21, 2013 @ 1:57 p.m.

INSTITUTIONAL INVESTORS FLOODED INTO PHOENIX, THEN WENT ELSEWHERE -- SPECIFICALLY SACRAMENTO. Radar Logic Research reported today (March 21) that institutional investors (corporations, partnerships, investment trusts) poured money into Phoenix in the first half of last year as such purchases zoomed 88%. Then such sales dropped sharply in the second half. But in that second half, institutional sales in Sacramento soared 101%. Best, Don Bauder

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