HOUSING MARKET CONTINUES TO SIZZLE
14.2 percent boost ranks third in nation; pace not seen in county since 2014
San Diego home prices rose the third fastest in the nation to start the year at 14.2 percent, behind Phoenix, at 15.8 percent, and Seattle, up 14.3 percent, according to the S&P CoreLogic Case-Shiller Indices.
San Diego home prices rose the third fastest in the nation to start the year at 14.2 percent.
January home prices surged across the nation with Phoenix leading the pack, up 15.8 percent, and Seattle, up 14.3 percent, the S&P CoreLogic Case-Shiller Indices reported Tuesday. Experts pointed to low mortgage rates and lack of homes for sale as driving factors.
The last time San Diego County home prices were up so much was May 2014 as the market came out of the Great Recession. Price acceleration has been much higher in the region before — up 33.4 percent in July 2004 and 27.2 percent in June 1989.
National prices increased an average 11.2 percent, which was its fastest appreciation since 2006.
Lawrence Yun, chief economist at the National Association of Realtors, said that national housing wealth is estimated to have increased $3.4 trillion in the last 12 months, or $30,000 on average per homeowner. However, he said what is good for homeowners means trouble for first-time buyers.
“More supply is clearly needed to tame the price growth,” he wrote in an analysis. “Any hindrance to homebuilding, therefore, will mean a shrinking of the middle class, as homeownership will become increasingly more difficult to achieve.”
The Case-Shiller indices take into consideration repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The San Diego County median
home price for a resale single-family home in January was $710,000, according to CoreLogic data provided by DQNews.
Zillow economist Matthew Speakman wrote in his analysis of the numbers that it appears home prices will keep increasing in the months to come. He said signs of an improving economy and competition for few homes would push up prices.
“Homes in many areas,” he wrote, “went under contract in January — generally one of the slower times of the year — merely days after hitting the market and about a month faster than the same period a year ago.”
The Redfin Data Center said the median days on market for a San Diego County home was around 14 days in January, compared with 35 at the same time last year.
Speakman wrote that rising mortgage rates do not seem to faze buyers. The interest rate for a 30-year, fixed-rate mortgage hit a record low of 2.68 percent in December, said Freddie Mac. It rose slightly to 2.74 percent in January and 2.81 percent in February.
Selma Hepp, CoreLogic deputy chief economist, said her biggest concern for the future is the lack of homes for sale across the nation. Sparse home inventory has been tied to a major slowdown in building during the Great Recession — as the U.S. population continued to grow — and potential sellers keeping homes off the market during COVID-19.
“Potential sellers may be discouraged by their inability to find a new home,” she wrote, “and subsequently choose to not list their own home — leading to a vicious cycle of declining for-sale homes.”