San Diego home price gains slowed in September, but America's finest City remains as one of the top markets for home price gains in September.

The S&P CoreLogic Case-Shiller Indices reported that San Diego metro saw a 25% home price gain in a year, making it the fourth fastest-growing market in 20-city index.

Phoenix was the top market, up 33.1% in a year. It was followed by Tampa, up 27.7%, and Miami, up 25.2%. 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 looking at the closely watched index said there are signs the real estate market is cooling. September was the first time national price gains had slowed since May 2020.

National Housing Price Change

“If I had to choose only one word to describe September 2021’s housing price data, the word would be ‘deceleration,’ 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-shattering runup on prices during the pandemic, typical buying slowdown in fall and winter, and buyers’ willingness to pay over asking.

However, with low mortgage interest rates, a robust job market, labor and materials shortages, and a deluge of first-time homebuyers, house price growth should comfortably exceed historical averages over the next year.

Interest rates for mortgages are still historically low and even a slight uptick did not seem to convince any real estate experts it was affecting the market yet.

The interest rate for a 30-year, fixed-rate mortgage was 2.9% in September, reported Freddie Mac, up from 2.89% the year before.

The Case-Shiller Indices are different than just looking at the median home price. It takes into consideration repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The median price for a resale single-family house in San Diego County in September was $831,250.

San Diego metro’s price gain of 25% is still high based on historic standards, but there have been other peaks. The rate increased 27.8% in a year in July, which was its biggest since December 2004. The highest annual gain was 33.4 percent in July 2004.

Among California metros, San Diego is still the fastest gainer — a title it has held since July 2019. In September, San Francisco was up 19.8% in a year and Los Angeles was up 18.3%. The markets with the smallest gains were Minneapolis, up 12.8%, and Chicago, up 11.8%.

Selma Hepp, CoreLogic deputy chief economist, said prices are likely to continue to rise but conditions might be getting slightly better for home shoppers. “There is still low availability of for-sale homes,” she wrote, “which continues to drive price growth, but the competition has lessened and assuaged some of the bidding war intensity.”

Source: SDuniontribune by Phillip Molnar