Home prices were up after months of slow growth
Home prices were up 2 percent annually in the San Diego metropolitan area as of July, said the S&P CoreLogic Case-Shiller Indices released Tuesday.
The increase was a slight turn of fortunes for the market, which has had annual gains of around 1 percent since January. Still, it is a far cry from the heyday of price increases the last couple of years. In July 2018, San Diego home prices were up 6.2 percent in a year.
Home price gains have slowed nationwide, up 3.2 percent in a year, with experts pointing to affordability issues as the main culprit. The most expensive markets have the most slothful gains, and Seattle has seen prices decline 0.6 percent.
Among California metro areas, San Diego had the biggest annual gains. San Francisco prices were up 0.2 percent in a year, and Los Angeles up 1.1 percent.
Some of the markets hit hardest by the Great Recession are now seeing the biggest boosts. Phoenix metro area gains were up 5.8 percent, followed by Las Vegas at 4.7 percent and San Francisco at 0.2 percent.
Zillow economist Matthew Speakman said the data offers proof that the housing malaise may be nearing its end.
“Teamed with steady home builder sentiment, growing home construction employment and still-low mortgage rates, show the housing market still has plenty of fight as summer turns to fall,” he wrote in an analysis.
The mortgage rate for a 30-year, fixed-rate mortgage was 3.77 percent in July, said Freddie Mac. That was down from 4.53 percent at the same time last year.
The Case-Shiller indices take into consideration repeat sales of identical single-family houses as they turn over through the years. Prices are adjusted for seasonal swings. The San Diego County median home price for a resale single-family home in July was $629,000, said CoreLogic.
Costly metro areas, like San Diego, will likely continue to see sluggish growth, wrote Ralph McLaughlin, an economist with CoreLogic.
“This is a result of years of unprecedented yet unsustainable growth along the West Coast combined with stubbornly solid economic growth that is benefiting areas initially left out of the recovery from the Great Recession,” he wrote.
Some analysts also attribute the slowdown to changes in the tax code that make buying in high cost markets less advantageous and changing buyer attitudes.
Likely increasing demand in Southern California is a slowdown in new home construction, which could lead to increased competition for available homes. While nationwide homebuilding showed big gains in August, the numbers so far this year for San Diego metro have not been near past years’ totals.
San Diego metro had built 43 percent fewer homes in the first six months of this year. County builders constructed 3,924 homes as of June, down from 6,953 at the same time last year.
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S&P CoreLogic Case-Shiller Indices
Yearly increase by metropolitan area:
Phoenix: 5.8 percent
Las Vegas: 4.7 percent
Charlotte: 4.6 percent
Tampa: 4.5 percent
Minneapolis: 4.2 percent
Detroit: 4.1 percent
Atlanta: 4 percent
Boston: 3.9 percent
Cleveland: 3.2 percent
Denver: 3.1 percent
Dallas: 2.7 percent
Miami: 2.7 percent
Washington, D.C.: 2.7 percent
Portland: 2.5 percent
San Diego: 2 percent
Chicago: 1.6 percent
Los Angeles: 1.1 percent
New York: 0.9 percent
San Francisco: 0.2 percent
Seattle: -0.6 percent
NATIONWIDE: 3.2 percent