San Diego rolls out of US rankings for house price hikes

San Diego fell from its position as one of the top markets for home price hikes in September.

The S&P CoreLogic Case-Shiller Indices reported on Tuesday that the San Diego Metro saw house prices rise 25% in one year, making it the fourth fastest growing market in the 20 index. cities. It was the first time in 13 months that America’s Finest City failed to make the top three.

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Phoenix was the largest market, up 33.1% in one year. It was followed by Tampa, up 27.7%, and Miami, up 25.2%. The San Diego Metro (which includes all of San Diego County) was tied with Dallas for fourth, also up 25%.

While nationwide price gains are still substantial, up 19.5% on average, many experts examining the closely watched index said there were signs the real estate market was cooling. In September, domestic price increases slowed for the first time since May 2020.

“If I had to choose one word to describe the September 2021 house price data, the word would be ‘decelerating,’ wrote Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow. Jones Indices.

Housing analysts say a variety of factors are affecting the market, including an expected slowdown after a record price hike during the pandemic, a typical slowdown in fall and winter purchases, and the willingness of buyers to pay for ask.

Kwame Donaldson, an economist at Zillow, said the latest turn of events shouldn’t be a sign that house prices are going to go down.

“With low mortgage interest rates, a robust job market, labor and material shortages and a deluge of first-time buyers,” he wrote, “growing house prices will comfortably exceed historical averages over the next year “.

Mortgage interest rates are still historically low, and even a slight hike hasn’t seemed to convince real estate experts that it is still affecting the market.

The interest rate on a 30-year fixed-rate mortgage was 2.9% in September, reported Freddie mac, compared to 2.89% the previous year. The rate is also up from the December average of 2.68%, which was the lowest since 1971.

Case-Shiller indices are different from just looking at the median home price. It takes into account repeat sales of identical single-family homes – and are seasonally adjusted – as they renew over the years. The median price of a single-family resale home in San Diego County in September was $ 831,250.

The 25% San Diego Metro price gain is still high based on historical standards, but there have been other spikes. The rate rose 27.8% year-on-year in July, the largest since December 2004. The highest annual gain was 33.4% in July 2004.

Among California subways, San Diego is still the fastest winner – a title it has held since July 2019. In September, San Francisco was up 19.8% year-on-year and Los Angeles by 18.3%. The markets with the weakest gains were Minneapolis, up 12.8%, and Chicago, up 11.8%.

Selma Hepp, deputy chief economist at CoreLogic, said prices are expected to continue to rise, but conditions may improve slightly for home buyers.

“There is still a low availability of homes for sale,” she wrote, “which continues to drive price growth, but the competition has faded and has dampened some of the intensity of the demand. auction war ”.

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