Explaining Southern California's economy

Southern California house prices: It's deflation, folks

Foreclosures Spike As Banks Accelerate Loan Default Notices

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A for sale sign is posted in front of house on September 15, 2011 in Glendale, California. Sales in California are on the upswing, but prices are unstable.

DataQuick has crunched the numbers on March housing sales and prices in Southern California. There's good news and bad news. From my perspective, the bad news is much more bad than the good news good. 

This is from DataQuick:

March sales of newly built homes rose almost 9 percent from a year earlier, marking the second consecutive month with a year-over-year gain. But March’s new-home tally was still the second-lowest for that month in DataQuick’s records back to 1988. Last month’s sales of existing (not new) single-family detached houses were the highest for a March since 2010, while resale condo sales were the lowest for that month since 2009.

BUT:

The median price paid for a Southland home last month was $280,000, up 5.8 percent from $264,750 in February but down 0.2 percent from $280,500 in March 2011. The March median was the highest since the median was also $280,000 last September. The year-over-year decline in the March median was the smallest since February 2011, when the $275,000 median was unchanged compared with a year earlier.

Last month’s median was 13.4 percent above the low point for the current real estate cycle – $247,000 in April 2009 – and 44.6 percent below the $505,000 peak in mid 2007.

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Starbucks price hike: You will pay 10 cents more for your latte!

But only if you live in the Northeast or the "Sunbelt." Southern California will be spared. For now.

I hate to admit this, but I missed the spike in coffee bean prices in 2011. The commodity is now up 42 percent on the five-year average, according to Bloomberg (which also provided the video report on Starbucks that I've embedded above).

Why do I hate to admit this? Because I can't live without coffee. I guess the issue here is that I've been drinking such el cheapo coffee for the past year that I didn't notice. I certainly wasn't closely following the coffee futures market.

Now, I suppose you could take the 10-cent Starbucks price increase, on beverages like lattes and brewed java, as the perfect opportunity to do what those pop personal-finance folks are always counseling you to do, particularly at the beginning of a new year: Quit buying lattes at Starbucks and start investing your savings. 

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