Increases second-slowest in West, but outpaced the national average
Existing home prices in July for the San Diego metropolitan area increased 6.2 percent in a year, its slowest pace since January 2017, according to the S&P CoreLogic Case-Shiller Indices released Tuesday.
San Diego’s price increases were the second-slowest in the West, only ahead of Portland, said the index, which studies the metropolitan areas of 20 major cities. The San Diego region still slightly outpaced the national average of 6 percent.
The indices evaluate home prices by more than just price, tracking repeat sales of identical single-family houses as they turn over through the years. It is a favorite of economists, who use it to get a more complete view of the market instead of just the median home price.
Price increases have slowed throughout much of the nation, with experts citing a variety of reasons: A gain in the number of homes for sale, rising mortgage interest rates and rent growth slowing, which may limit some pressure to buy.
“A slight autumn chill has fallen over the housing market, and after an incredibly hot past few years, it’s probably fair to say the cool-down is a welcome development for many would-be home buyers,” Zillow senior economist Aaron Terrazas wrote.
Las Vegas led yearly price increases at 13.7 percent, followed by Seattle at 12.1 percent and San Francisco at 10.8 percent.
David Blitzer, managing director of the index, wrote in the report that 15 of the 20 cities studied saw smaller monthly increases than the same time last year (including San Diego). Sales of existing single-family homes are down, he wrote, but residential building permits were up.
“Rising home prices are beginning to catch up with housing,” he said.
Following national trends, San Diego has seen more homes available for purchase over the last few months. In July, there were 7,021 listings, up from 5,828 in July 2017 and 6,571 in July 2016, according to the Greater San Diego Association of Realtors.
Mark Goldman, real estate lecturer at San Diego State University, said the local market was strongly affected by increasing interest rates, more so than other parts of the nation, because of higher prices in California.
“Even if the house stayed the same price,” he said, “the house got more expensive because interest rates are higher.”
The interest rate for a 30-year, fixed-rate loan was 4.72 percent at the end of July, Mortgage News Daily reported, up from 4.1 percent at the start of the year. The median home price for a single-family resale home was $630,000 in July, which meant the monthly mortgage payment (assuming 20 percent down) went from $3,044 at the start of the year to $3,275 by July.
Despite the recent slowdown in price gains, local business leaders and the San Diego Regional Chamber of Commerce are still worried about the ability of workers to own homes.
“Although indicators are suggesting that home prices are no longer consistently increasing at the same outrageous pace, home ownership is still out of reach for too many San Diego families,” wrote Sean Karafin, the chamber’s vice president of economic research.
While all cities in the index increased in prices, the slowest yearly increases were in Chicago at 3 percent and Washington, D.C., at 2.7 percent.
S&P CoreLogic Case-Shiller for July 2018
Yearly increases by city
Las Vegas: 13.7 percent
Seattle: 12.1 percent
San Francisco: 10.8 percent
Denver: 8 percent
Phoenix: 7.5 percent
Tampa: 6.8 percent
Los Angeles: 6.4 percent
Detroit: 6.2 percent
San Diego: 6.2 percent
Boston: 6 percent
Minneapolis: 6 percent
Atlanta: 5.8 percent
Cleveland: 5.7 percent
Charlotte: 5.6 percent
Portland, Ore.: 5.6 percent
Dallas: 5 percent
Miami: 5 percent
New York: 3.4 percent
Chicago: 3 percent
Washington, D.C.: 2.7 percent
Nationwide: 6 percent
San Diego Union-Tribune