As a bit of an epilogue to San Diego's terrific bubble experience, Toscano has summarized the city's housing market conditions in his latest post Shambling Towards Affordability: Year-End 2010 Edition.
Why is Toscano such a great read? He has continually concentrated on the true "fundamentals" of real estate investing, including:
- price to income ratios
- price to rent ratios
- construction and real estate sector employment
- loan arrears
- rent and wage growth
- months of inventory
- Even through the severe recession, he quickly understood rental growth continued to track CPI inflation even as wages and house prices were dropping and inventory was high.
- Prices per square foot closely tracked the Case-Shiller house price index, allowing a 3 month sneak-preview into apples-to-apples price movements. (The CS-HPI is released with a 3 month delay.)
- Construction and real estate-related employment distress portended a significant increase in foreclosure activity.
- Higher quality houses tend to be more "downwards sticky" compared to lower quality stock; likewise detached property prices fell slower than condos and apartments.
San Diego and Toscano ftw.