July 18, 2024

San Diego real estate market
San Diego real estate market

San Diego real estate market stats show a firming trend. But, I personally believe that before a real bottom is in place, we must see an improving local job market. With yesterday’s announcement of a 0.1 % micro improvement in the unemployment rate to 9.4% , this certainly is not the beginning a major trend.  I don’t think we are close to a turnaround in the worst jobs turndown since the thirties.

The unemployment numbers look like they are getting worse at a slower rate. If I’m correct, how can one believe that the San Diego real estate market is improving by any  significant amount? There are plenty of great arguments that the published Unemployment Rate of 9.4% is understated.

There is one item that confirms the arguments: the unprecedented and historical record decline of 18% in Federal Tax Revenues is a the confirming number. The 18% reduction in tax revenue correlates more with a 15% unemployment rather than a 9.4% unemployment rate.

At least the government is hiring.

The private sector economy is hunkered down, shell shocked, waiting for the next blow to fall. Large numbers of workers, investors, homeowners, and businesspeople have simply given up. They are no longer counted in the unemployment numbers.

I would say there just isn’t enough of a trend in the BLS monthly data to suggest an end date for the recession. I’d say you’d need at least two more BLS reports of improving net payrolls and two upward revisions in the work week.

If there is no bottom in sight for real estate, how can the stock market be putting in such a stellar proformance? Well, to answer my own question, it could very well be that (as it’s often said) the stock market is looking six months down the line. But, than again, the current stock market rally is being driven by momentum buying and liquidity from the government and hedge funds. This too may end badly. It may take some time, but by then the retail investor will be invested, and then look for the institutions to exit, leaving the little guy holding the bag. Will they ever learn?

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2 thoughts on “San Diego Real Estate Market – Unemployment – Stock Market

  1. If you are going to buy a home that you are planning on living in, buy one that you can afford, taxes and insurance and maintenance included. The “asking” price does not tell the whole story, nor does the “adjustable” loan. People paid too much thinking they could flip the house, found no buyer and the adjustable loan was “adjusting”, just like they’d been warned. Of course, no one fore saw the gas prices, the electricity prices, the food prices going through the roof, and all the unemployment.

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  2. Pingback: San Diego Real Estate Market

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