UNION-TRIBUNE - August 31, 2010
San Diego home prices increased 11.2 percent in June from a year ago and it was the only metro area in the country with 14 months of consecutive increases in home prices, says the latest Standard & Poor’s Case-Shiller Home Price Index released Tuesday.
Once again, San Diego had the second highest annual price increase of the 20 metro areas surveyed. San Francisco took the top spot with an 18.3 percent increase.
But San Diego’s streak may soon come to an end.
On a monthly basis, San Diego saw its home prices increase an anemic 0.4 percent. Since home-buying activity varies at different times of the year — with spring and early summer typically being the busiest time — Case-Shiller also provides seasonally adjusted numbers. By that metric, San Diego’s prices actually declined 0.3 percent in June from the previous month.
On a nationwide level, prices in the 20 metro areas Case-Shiller tracks were up 4.2 percent from June 2009 and up 1 percent on a monthly basis.
The Case-Shiller numbers weren’t as dire as some economists — who were concerned about slowing sales activity — had predicted. Despite that, there are plenty of reasons to be concerned about the housing market going forward, said David M. Blitzer, the chairman of the Index Committee at Standard & Poor’s.
“The worry starts when you remember that the Homebuyers’ Tax Credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak. The inventory of unsold homes and months’ supply data were particularly troubling,” he said. “If this relative weakness in demand continues, it will likely filter through to home prices in coming months.”
Still, Blitzer added, that housing market — especially in California where San Diego, San Francisco and Los Angeles had among the best annual price increases — was more stable than last year.
“California cities have moved from some of the hardest hit to three of the four leading cities based on year-over-year gains,” he said.
Las Vegas, however, continued to struggle and was the only market where prices fell in two months of the second quarter.
Mark Goldman, a real estate instructor at San Diego State University, said for all the monthly ups and downs, he believes the local housing market is finding its collective footing.
“The values are coming to stability,” he said.
Of course, that doesn’t mean San Diego is headed for double-digit growth any time soon. Instead, Goldman said, the housing market is coming to terms with the new reality. Unlike in 2004 and 2005 when there was a buying frenzy, consumers now are taking a wait-and-see approach.
“It used to be I better buy a house today or I won’t be able to buy it. Now it is the exact opposite,” he said. “The urgency no longer exists.”
