Home prices in San Diego rose 22% in April. The highest of the pandemic
Home prices in San Diego rose in April at an unprecedented rate for nearly eight years and topped almost all national markets.
Prices rose 21.6% per year in the San Diego metro area, the S&P CoreLogic Case-Shiller Indices reported Tuesday. Phoenix was the only metro to gain faster, albeit narrowly, at 22.3%.
April marked the largest annual increase in the national average of the index, 14.6%, in more than 30 years of existence. It should be noted that San Diego generally outperforms the rest of the country and saw a 33.4% increase in July 2004 (dropping to 26.7% in October 2008).
“April’s performance was truly extraordinary,” wrote Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices.
Lawrence Yun, chief economist for the National Association of Realtors, said price increases are likely to continue over the next few months and likely not slow until late 2021 or early 2022. He said a lack of houses for sale, which makes it difficult to meet. the increase in demand is one of the main reasons why the national composite has reached an all time high.
“The strongest annual price appreciation on record is the result of an ongoing housing shortage,” Yun wrote in an analysis.
Yun said home builders ramping up production and ending mortgage forbearance programs could increase inventories and ease upward pressure on prices.
Experts also highlighted other reasons why rapid increases have occurred besides lack of inventory: millennial buyers becoming homeowners, improving the fortunes of houseworkers during the pandemic, and low rates. mortgage.
The interest rate for a 30-year fixed-rate mortgage was 3.06% in April, said Freddie mac, up from 3.31 percent the year before. The rate is up from the December average of 2.68%, which was the lowest since 1971.
San Diego’s 21.6 percent increase exceeded other California markets. Prices rose 15.1% in San Francisco and 14.7% in Los Angeles.
The Case-Shiller indices take into account repeat sales of identical single-family homes – and are seasonally adjusted – over time. The median price of a single-family home in San Diego County in April was $ 798,500, according to CoreLogic data provided by DQNews.
Matthew Speakman, economist for Zillow, wrote in his analysis of the index that a good sign for potential buyers is a slight increase in the number of homes for sale in recent months. This should reduce the need for auction wars which dramatically raise prices.
“But a return to a balanced market is still a long way off,” he wrote, “and there is little, if any, sign that home price appreciation will begin to ease anytime soon.”
Even the smallest price increases in the 20-city index far exceeded inflation. Chicago was up 9.9% per year and Minneapolis up 11.2%.
San Diego has not reached the top spot among the 20 subways since April 2003, when prices were up 18.7 per year. He has been No. 2 behind Phoenix for the past three months.
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S&P CoreLogic Case-Shiller Indices
Annual increase by metropolitan area
San Diego: 21.6%
Denver: 15.4 percent
San Francisco: 15.1%
Los Angeles: 14.7%
Washington, DC: 13.6%
New York: 13.5%
Las Vegas: 12.5%