San Diego County homebuyers, like most of the nation, shrugged off early COVID-19 fears in February as prices increased more than any other California market.

Home prices in the San Diego metropolitan area had risen 4.6 percent in a year, the S&P CoreLogic Case-Shiller Indices reported.

The index reflects a strong economy up until the moment the coronavirus began entering the American psyche and massive job losses followed. All home prices in the 20-city index were up and the nationwide average yearly increase was 4.2 percent.

Selma Hepp, deputy chief economist for CoreLogic, said the report showed enthusiasm for home purchases in February for a variety of reasons.

“Home buyers, particularly millennials, were encouraged by falling mortgage rates and a strong employment market,” she wrote in an analysis.

Phoenix had the biggest yearly gain, up 7.5 percent, and was followed by Seattle at 6 percent. Both Charlotte and Tampa were up 5.2 percent. Chicago had the smallest gain at 0.7 percent.

The Case-Shiller indices take into consideration repeat sales of identical single-family houses as they turn over through the years. Prices are adjusted for seasonal swings. The San Diego County median home price for a resale single-family home in February was $647,000, said CoreLogic

Zillow economist Matthew Speakman wrote that the market appeared to be gearing up for a major spring selling season before the virus hit.

“Things were looking up for the housing market in mid-winter, with low interest rates and still-secure job prospects combining to boost demand for housing,” he wrote, “just as a growing share of millennials were looking to finally take the leap into homeownership.”

There are already signs interest in homebuying has tapered off since March, as well as a many homes being taken off the market. 13.1% of homes in San Diego County were delisted from March 14 to April 10.

Bill Banfield, a Quicken Loans executive vice president, wrote that a quick restart of the economy might actually push prices higher because of all the homes removed from the market.

“If buyers come back faster than sellers, it could cause prices to push even higher as buyers compete over the slim choices,” he wrote Tuesday in an analysis of Case-Shiller data.

While opinions differ on what the home market could look like later in the year, many expect low interest rates to soften the blow.

The mortgage interest rate for a 30-year, fixed-rate loan was 3.47 percent in February, said Freddie Mac, down from 4.33 percent at the same time last year. The average rate dropped in March to 3.45 percent and early April data shows it could be even lower than that.

“Mortgage rates remain historically low and millennials are still active in the market,” Hepp wrote, “which suggests that while the spring home-buying season may be disappointing, there are promising fundamentals for the housing market when the economy picks up speed again.”

* * *

S&P CoreLogic Case-Shiller Indices

Yearly increase by metropolitan area

Phoenix: 7.5 percent
Seattle: 6 percent
Charlotte: 5.2 percent
Tampa: 5.2 percent
Minneapolis: 5 percent
Boston: 4.9 percent
Portland: 4.9 percent
Atlanta: 4.6 percent
San Diego: 4.6 percent
Cleveland: 4.3 percent
Detroit: 3.7 percent
Los Angeles: 3.7 percent
Washington, D.C.: 3.7 percent
Las Vegas: 3.5 percent
Denver: 3.4 percent
San Francisco: 3.4 percent
Miami: 3.3 percent
Dallas: 2.5 percent
New York: 1.5 percent
Chicago: 0.7 percent
NATIONWIDE: 4.2 percent

Source: SDuniontribune by Phillip Molnar