Home prices have gone up more in San Diego than Los Angeles, San Francisco and others on the Pacific coast
Home prices were up 3.9 percent annually in the San Diego metropolitan area in November, outpacing all other West Coast markets, the S&P CoreLogic Case-Shiller Indices reported Tuesday.
San Diego metro’s price gain slightly outpaced the national average gain of 3.5 percent, and was a substantial reversal after a sluggish start to 2019. From January to June, annual price gains locally were around 1 percent.
The index showed gains across most markets, which analysts mainly attributed to dropping mortgage interest rates. Other factors include low unemployment and tight home inventory driving up prices.
Low-cost markets had the biggest gains. Phoenix was up 5.9 percent, Charlotte up 5.2 percent and Tampa up 5 percent. Chicago had the lowest gain at 0.4 percent.
San Diego metro’s rise outpaced markets it often falls behind on the West Coast, including Portland and Seattle, both up 3.3. percent. The same goes for Los Angeles, up 2.7 percent, and San Francisco, up 0.5 percent.
CoreLogic chief economist Matthew Speakman said the nation’s growing population and other factors have pushed prices up.
“Add in low mortgage rates, family income growth, and a limited inventory of homes for sale,” he wrote, “and that translates into home-price growth that surpasses overall inflation on other consumer products.”
The interest rate for a 30-year, fixed-rate mortgage was 3.7 percent in November, said Freddie Mac, down from 4.87 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 November was $633,750, said CoreLogic.
Zillow economist Matthew Speakman said the shortage of homes for sale could be seen as a primary driver of price acceleration.
“This lack of homes has made competition among buyers — buoyed by otherwise favorable economic conditions — even more fierce,” he wrote in an analysis, “in turn helping to push up prices even faster.”
Speakman said the lack of homes for sale could be a threat to the housing market as an overheating of prices could lead to turning away more buyers than it attracts.
There were 5,541 homes for sale in November in San Diego County, said the Greater San Diego Association of Realtors. That’s down from 7,445 at the same time the previous year.
It is probably unlikely that home prices will be going down anytime soon, said Bill Banfield, Quicken Loans chief risk officer, about the latest index numbers.
“If we fast forward ahead of this data,” he wrote, “we see interest rates falling again and the same constrained inventory issues. This should keep home prices rising in most areas of the country.”