The pace of annual home price appreciation held steady in San Diego in March, the S&P Case Shiller Index showed Tuesday.
In March, resale single family home prices rose about 4.8 percent over the year, about a tenth of a percent faster than they did in February.
Over the last seven months, the pace has hovered between 4.6 and 5 percent. While that’s a far cry from the investor-led 20-percent plus annual appreciation in the summer of 2013, Beacon economist Jordan Levine said he considers the pace strong relative to historical norms.
“We had projected that prices would slow down a bit this year but I think the thing that we’re seeing is that the pace of inventory building hasn’t been as solid,” he said. “Demand is there but we haven’t added a lot of new supply commensurate with that demand.”
Levine said while the pace of appreciation is ahead of wages and personal income, high-wage job growth in San Diego’s technology sector means people can still afford property here. As long as interest rates remain low, he said he’s not concerned about another bubble.
“Price growth could remain pretty strong unless we see a really sustained increase in building permits that would last a couple of years,” he said. “I don’t think that’s going to happen because it hasn’t happened yet.”
San Diego’s annual gain in housing puts it just below the 20-city composite, which rose 5 percent over the year. The county’s gain ranks it 12th out of the 20 cities. Home prices in San Francisco are rising fastest in the nation, up 10.3 percent annually. Los Angeles home prices are up 5.5 percent over the year.
David Blitzer, chair of the index committee for S&P Dow Jones, said in a statement that home price gains outpacing personal income and wages is squeezing out potential home buyers.
“All of this suggests that some future moderation in home price gains is likely,” he said. “Moreover, consumer debt levels seem to be manageable. I would describe this as a rebound in home prices, not a bubble and not a reason to be fearful.”
Adjusted for seasonality, home prices rose 1.2 percent from February to March, generally the beginning of peak homebuying season.
CoreLogic, another real-estate tracker, reported that in March the median resale single family home in the county sold for $500,000, up 6.3 percent over the year.