San Diego Home Prices Outpaced Nation and California
Prices in San Diego County’s housing market in November outpaced the rest of the nation and California, said the S&P CoreLogic Case-Shiller Indices released Tuesday.
Adjusted for seasonal variation, the San Diego regional index of home prices was up 5.8 percent in November compared to a year ago. The nationwide increase was 5.6 percent, setting an all-time high in three consecutive months.
The Los Angeles index rose by 5.5 percent and by 5.3 percent in San Francisco. David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, wrote in the report Tuesday that recent gains show it could end the boom-bust cycle that began about 12 years ago.
“The recovery has been supported by a few economic factors: low interest rates, falling unemployment, and consistent gains in per-capita disposable personal income,” he wrote.
Seattle had the biggest increase in the index at 10.4 percent. It was followed by Portland at 10.1 percent and Denver at 8.7 percent. The weakest gains were in Washington, D.C., at 3.7 percent and New York at 2.4 percent. While San Diego showed higher gains than the rest of the state, it still has slowed compared to the start of the year. In January, the index was up 6.9 percent year over year. It began to drop by the end of the summer, hitting 5.3 percent in September.
There’s some indication the index could fall more heading into 2017. Svenja Gudell, Zillow chief economist said in a statement that rent growth flattening out could have an impact on home prices in the coming months. “Slower rental growth may take some of the heat off those renters thinking of buying just to escape the volatility of steep annual rent hikes, potentially leading to a softening in demand,” she wrote.
Gudell predicted a change in rent growth could lead to a slowdown in apartment and condo construction and boost single-family home building. In San Diego County, single-family home construction has slowed considerably with just 1,545 new homes predicted to open this year.
The median home price in San Diego County was $495,000 in December, unchanged from November, CoreLogic reported last week. The Case-Shiller index goes beyond just home prices to track repeat sales of identical single-family houses as they turn over through the years.