A Two-Fer

Today, updates are provided today for two of the data series that have become popular here over the last year or so - Southern California housing and SUV Fill Up costs. Both continue to go up, as sun-tanned homeowners in Escalades continue to live an idealized life, the envy of the rest of the world.

Dataquick reported yesterday that sales volume has hit half-decade lows and that price appreciation has fallen to levels not seen for almost as many years. Overall, here in the Southland (as they say on the local news), year-over-year appreciation has dropped back into the single digits, now totaling a miniscule nine percent.

Nine percent!

On a median price home of around a half million dollars, that's not even $50,000 a year in extra spending money. If the yearly bonus that you get for owning house in the Southland continues to shrivel up, everyone is going to have to tighten their belts - that may not be pretty.

Here's the chart of year-over-year price gains by county - a pretty steep downward curve in the last couple months for both San Bernardino and Ventura Counties, while San Diego continues to clunk along the bottom performing a near perfect soft-landing to date (not that the landing will necessarily remain soft).

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The usually effervescent head of DataQuick, Marshall Prentice, was a bit less sanguine this month.

"March and April have shown us that the boom phase of this cycle is behind us, so now it's just a question of how the cycle ends. Right now it looks like changes in the real estate market are happening gradually. But there's a lot of uncertainty among analysts regarding the effect of higher interest rates and how fast the economy is generating demand in regional markets," said Marshall Prentice, DataQuick president.

It was not more than six months ago that Marshall was much more confident in the outcome.

The big question is still whether or not the real estate market will end this cycle with a crash, or with a soft landing. Right now the latter scenario is still the most likely. Home values have doubled in the past four years and almost all, if not all, of those gains are here to stay," said Marshall Prentice, DataQuick president.

Hmmm... Maybe it's these charts of sales volume that are causing the uncertainty now. The sales volume is really starting to look frightening - the scale on this chart had to be adjusted to accommodate the plunge by Ventura County, and overall the year-over-year decline was the worst in more than a decade.

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Speaking of Ventura County, where these missives are written and where sales volume is declining so, there's the odd story of a home nearby that's been for sale since last summer and in pre-foreclosure since last fall. About two months ago, a Sale Pending sign went up for this near-million dollar home, then about a week ago the Sale Pending sign came down. A couple days later the For Sale sign came down.

This was followed by a burst of activity with the conspicuous absence of any moving van, and now the house sits there with no For Sale sign and no window coverings. Don't you usually leave the window coverings on when you sell the house?

Maybe the homeowner made a deal with the local gas station owner, who perhaps was in need of some slightly used draperies, to get a couple tanks of gas for a speedy exit out of town.

Or maybe not - it just looks strange without window coverings.

Anyway, onto gasoline prices. A fill-up just a short time ago resulted in a tab of just over $50 for a mere 15 gallons of mid-grade. That wasn't pleasant, but SUV drivers have it much worse.

In this latest update of the SUV Fill Up index at $3.30 a gallon, the crowd favorite Hummer H2 has been joined above the $100 mark by the Escalade and the smaller version of the Suburban and Yukon.
One interesting aspect of these big SUVs is that they don't fit into standard sized garages - they have to sit out in front of the McMansions for the rest of the world to see.

It's a good thing that home equity gains are still trickling in here in Southern California - sun-tanned homeowners in Escalades are going to need a little extra money to buy gas if they want to go anywhere this summer.