The S&P CoreLogic Case-Shiller Indices reported that San Diego metro saw a 24.4 percent home price gain in a year, making it the sixth fastest-growing market in 20-city index. San Diego had been in the top two markets in the closely watched index for most of 2021, but has now been in sixth for the past two months.

Phoenix dominated the November list with a 32.2 percent gain, followed by Tampa at 29 percent and Miami at 26.6 percent. While the increase is difficult for people who live in those cities, it’s much less expensive than San Diego. The median home price in Phoenix, for example, was around $410,000 in November — about $340,000 less than the San Diego median.

Nationwide home price increases have surged throughout the pandemic as the fortunes of many workers, especially those with stay-at-home jobs, improved. With demand surging for homes, supply has been unable to keep up, and prices have continued to climb.

Economist Kwame Donaldson said nationwide price growth has shown a slight slowing, but low inventory continues to put upward pressure on prices.

"Buyers are also finding fewer homes to choose from,” he said. “The number of houses listed for sale dropped to a record low last month.”

Donaldson predicted price appreciation would slow by the end of the year because of reduced fiscal support from the government, a leveling off of job growth and rising mortgage rates.

The interest rate for a 30-year, fixed-rate mortgage was 3.07 percent in November, reported Freddie Mac, up from 2.77 percent the year before. The rate is also up from December 2020’s average of 2.68 percent, which was the lowest in records going back to 1971.

Analysts think the San Diego metro area (which includes all of San Diego County) may not see as much of a knock from rising rates. Many buyers are forgoing mortgages altogether to come up with more competitive offers. Almost 27 percent of San Diego County home sales were in cash in the third quarter — the highest in seven years.

San Diego County has seen big growth in the Case-Shiller index before. In July 2004, home prices were up 33.4 percent in a year.

San Diego has been the fastest appreciating California metro since July 2019. Los Angeles prices were up 19 percent annually as of November, and San Francisco was up 18.2 percent.

Metros with the slowest gains were Minneapolis at 11.2 percent and Washington, D.C., at 11 percent.

Nationwide price gains were at 18.8 percent in November, a deceleration from this summer’s numbers near 20 percent. The 18.8 percent increase represents the sixth-highest reading in the index’s 34 years.

“We continue to see very strong growth at the city level,” said the CoreLogic report. “All 20 cities saw price increases in the year ended November 2021, and prices in 19 cities are at their all-time highs.”

Source: SDuniontribune by Phillip Molnar