Consumer confidence in San Diego County rose to its highest point in 16 months in January, as signs of economic stability increased. The following are the key findings include of the consumer confidence survey conducted by the Union-Tribune:

• 24 percent of respondents expect their income to be higher six months from now – a rise of 6 percentage points from December – and 63 percent expect it to remain the same, leaving less than 13 percent who expect a salary cut.
• 32 percent expect the future of San Diego business conditions to be better, up 7 points from December.
• 23 percent rate current San Diego business conditions as “good”, up nearly 7 points since December.
• 58 percent still think the current San Diego job market is bad, but that’s down by nearly 11 points from December.

Nationwide, optimism continued to build in February as well, according to the latest Thomson Reuters/University of Michigan consumer confidence survey. The survey reports that confidence rose from 74.2 in January to 77.5 in February, hitting its highest level since the dawn of the recession in January 2008.

Consumer confidence numbers are seen as leading indicators of economic growth, since they are seen as an indicator of how willing consumers might be to buy big-ticket items. But despite the improving mood, personal spending only increased 0.2 percent last month, as rising gas and fuel prices made consumers less likely to spend money on non-essential items.

Home Affordability in San Diego County at Record High – Tripled Since 2006!

Chief Economists Indicate San Diego Home Prices and Sales Will Inch Up In 2011

By Dean Calbreath of Union Tribune

COASTAL SAN DIEGO PROPERTIES

After a few weeks in August where the economic and housing outlooks have been a little sobering - even grim - the numbers at the beginning of September are looking increasingly positive in San Diego.

Take consumer confidence. We all know how important that is for economic activity and future housing sales. Well, the latest survey from the University of Michigan came in with a one point jump in overall confidence, after months of declines.

That may sound modest, and it is, but after so many bad headlines about the economy, it's a step in the right direction.

And indeed, the latest Commerce Department study finds that consumer spending is on the upswing, and just registered the biggest pickup in four months.

Meanwhile, there was surprisingly strong news from the industrial manufacturing front, which is a key factor for future employment growth: The Institute for Supply Management reported a one point gain in its manufacturing index for the latest month - which was enough of a shock to doom-and-gloom analysts on Wall Street that the stock market soared on the news.

On the housing front there were even more encouraging numbers:

1. Pending home sales , which had been sliding since the phase-out of the tax credits last spring, rose by 5.2 percent, according to the National Association of Realtors.
2. Also, the Standard and Poor's /Case-Shiller index reported that home prices in the top 20 metropolitan areas gained 4.2 percent year over year. Prices were up in 15 of the 20, including some big gains in California and elsewhere.

San Francisco prices rose by 14 percent for the year, San Diego by 11 percent. Minneapolis prices jumped 11 percent and Washington DC houses were up by 7 percent.

Gains like these clearly caught some analysts off-guard. A Bloomberg poll of economists before the Case Shiller numbers were released had forecast a more modest 3.5 percent increase.

Meanwhile Freddie Mac came up with roughly similar results. Its latest home value index measured a 3.1 percent average gain from the first quarter of this year through the second quarter ending June 30.

Though Freddie Mac said the increases can be partially explained by the housing tax credit program, historically low mortgage rates clearly are also playing a role.

As long as rates stay in the mid four percent range -- and Federal Reserve chairman says he's committed to keeping them low -- housing should increasingly look attractive to first-time and move up buyers, who find they can now afford much more house than they might have imagined.

Published: Realty Times September 6, 2010

COASTAL SAN DIEGO PROPERTIES