Existing home prices in September for the San Diego metropolitan area increased 4 percent in a year, the lowest in the West, said the S&P CoreLogic Case-Shiller Indices released Tuesday.
Among the 20 areas covered by the index, San Diego’s increase was the fourth lowest and below the national increase of 5.5 percent. The last time San Diego’s annual growth was lower was August 2012.
Price increases throughout the nation have slowed in recent months, with analysts mainly attributing declines to rising mortgage interest rates. Sixteen of the 20 areas studied showed smaller annual price gains.
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.
Cheryl Young, senior economist at Trulia, said San Diego had been increasing above the national average for years and outpacing wages. She said it would have been tough to maintain that price growth and it’s important to remember the region’s costs are still above much of the nation.
“Prices are still really high,” she said of the San Diego market. “It is healthier when you have price growth that is more manageable. When you look at 4 percent year-over-year price growth, that’s more in line with wage growth.”
Young said in addition to rising mortgage rates, she thought buyers were also sensing weakness in the market and possibly holding off on jumping on anything — like they were a few months ago.
The median price of a resale single-family home in San Diego County was $615,000 in September, CoreLogic said. At the end of September last year, the interest rate for a 30-year, fixed-rate loan was 3.97 percent, said Mortgage News Daily. It was 4.78 percent at the end of this September.
That means the monthly cost for a resale home has increased in a year by $294 a month.
Las Vegas had the highest annual price gains in the nation at 13.5 percent. It was followed by San Francisco at 9.9 percent and Seattle at 8.4 percent. The lowest price gains were New York City at 2.6 percent and Washington, D.C., at 2.9 percent.
Los Angeles metro area annual home prices increased 5.5 percent, also a reduction from major price gains in the past few years.
Aaron Terrazas, senior economist at Zillow, wrote in an email that the home market was becoming more balanced among buyers and sellers.
“There are already signs the market is beginning to swing toward buyers,” he wrote. “Inventory is up after almost four years of uninterrupted declines, especially in formerly red-hot and pricey West Coast markets, and price cuts are becoming more frequent.”
Trulia research showed the San Diego metropolitan area had the most price reductions — 20.5 percent — of the 100 biggest metro areas in the United States so far this year (as of October). It tied with Tampa, which also saw 20.5 percent of homes with a price cut.
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S&P CoreLogic Case-Shiller Indices for September 2018
Yearly increases by city
Las Vegas — 13.5 percent
San Francisco — 9.9 percent
Seattle — 8.4 percent
Denver — 7.3 percent
Phoenix — 7.2 percent
Tampa — 6.7 percent
Detroit — 6.3 percent
Minneapolis — 6 percent
Atlanta — 5.7 percent
Los Angeles — 5.5 percent
Charlotte — 5.2 percent
Cleveland — 5.2 percent
Portland — 5.1 percent
Boston — 5 percent
Miami — 4.6 percent
Dallas — 4.3 percent
San Diego — 4 percent
Chicago — 3 percent
Washington, D.C. — 2.9 percent
New York — 2.6 percent
National — 5.5 percent