San Diego home prices went up the third-fastest in the nation in August and appreciated at a pace not seen in more than two years.

Prices in the San Diego metropolitan area were up 7.6%, the S&P CoreLogic Case-Shiller Indices reported. It was the fastest increase since April 2018 and the first time the region cracked the top three in seven months.

The only places that recorded faster increases were Phoenix, up 9.9%, and Seattle, up 8.5%.

The average nationwide prices are up 5.7% annually.

Economists point to a lack of available homes for sale as the main driver of prices. Many potential sellers have elected to keep properties off the market as they wait out the pandemic, making the competition for a limited pool of homes very intense.

Secondary factors are record low-interest rates and workers not allowed to return to offices seeking a more permanent place to live.

“This heightened competition for the few homes on the market has placed consistent, firm pressure on home prices for months now,” wrote Zillow economist Matthew Speakman, “and there are few signs that this will relent any time soon.”

He wrote that the home market has withstood every shock possible in the last year and there is no reason to expect it would not continue. That’s despite factors that could affect other parts of the economy, like the stock market, the presidential election and increased COVID-19 cases.

A trend that has continued for months is the most densely populated areas are showing some slowing in price gains compared to the rest of the nation. San Francisco prices were up 4.1% in a year and New York City was up 2.8%. Yet, even in those cases, prices are climbing.

Selma Hepp, CoreLogic deputy chief economist, said home price gains should be slowing because that is normally what happens near the end of the summer. That isn’t happening and she also said it appeared there was no foreseeable reason why prices would not continue to rise.

“Not only was demand fueled by buyers planning on purchasing a home in the spring,” she wrote, “but also by those motivated by record-low mortgage rates, desire for a larger home or desire for a vacation home as a result of the pandemic.”

The rate for a 30-year, fixed-rate mortgage in August was 2.94%, said Freddie Mac, down from 3.62% 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 seasonally adjusted. The San Diego County median home price for a resale single-family home in August was $715,000, according to CoreLogic data provided by DQNews.

California has seen an especially strong real estate season throughout the pandemic — despite stronger lockdown measures than most of the nation. Los Angeles home prices were up 6.8 percent in August, also its highest in more than two years.

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S&P CoreLogic Case-Shiller Indices
Yearly increase by metropolitan area
Phoenix: 9.9 percent
Seattle: 8.5 percent
San Diego: 7.6 percent
Cleveland: 6.9 percent
Tampa: 6.9 percent
Los Angeles: 6.8 percent
Charlotte: 6.7 percent
Portland: 6.2 percent
Minneapolis: 5.8 percent
Boston: 5.7 percent
Washington, D.C.: 5.7 percent
Denver: 5.3 percent
Atlanta: 5.1 percent
Miami: 4.8 percent
Las Vegas: 4.7 percent
Dallas: 4.2 percent
San Francisco: 4.1 percent
New York: 2.8 percent
Chicago: 1.2 percent
Detroit: N/A
NATIONWIDE: 5.7 percent

Source: SDuniontribune by Phillip Molnar