San Diego had the seventh-highest home price increase in the nation in February, said a key real estate index released Tuesday. The region’s home price increased by 7.6 percent in a year, said the S&P CoreLogic Case-Shiller Indices. Seattle had the biggest increase in a year at 12.7 percent.
Other California cities covered by the 20-city index outpaced San Diego. San Francisco was up 10.1 percent in a year and Los Angeles up 8.3 percent. All cities covered in the index experienced gains, which experts attribute to a strong economy and limited home supply.
“With expectations for continued economic growth and further employment gains,” wrote David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, “the current run of rising prices is likely to continue.”
Blitzer said year-over-year national increases for the last 70 months compares to a previous run from January 1992 to February 2007. That time period represented 182 months of national increases, when prices averaged a 6.1 percent gain annually.
The indices evaluate home prices by more than just price, tracking repeat sales of identical single-family houses as they turn over through the years. Prices are adjusted for seasonal swings. The San Diego median home price in February for a resale single-family home was $580,000, said CoreLogic.
Cheryl Young, senior economist at Trulia, said the nationwide housing market is still recovering from a lack of building during the recession and the years after.
“There was just so much underproduction of housing,” she said. “Finally, we are in an era where the economy is much better but it is still very slow in terms of housing production.”
Young said first-time homebuyers in San Diego may face stiffer competition than other cities because of its strong job growth.
“In other cities, we see something where there is really low inventory but at the same time the economy is not quite as strong and you’ll see more moderate price growth,” she said. “In places like San Diego, we see those employment numbers that are really, really strong and equivalently large home price growth.”
The number of homes for sale is a concern for some business leaders. There were 4,636 homes listed for sale in February, down from 8,095 in February 2012 around the time prices started increasing.
“As prices continue to rise, homeownership becomes even more out of reach,” wrote Sean Karafin, a vice president at the San Diego Regional Chamber of Commerce, in an email. “The shortage of units that are affordable to young families is making it very difficult for employers to attract and keep talented employees in San Diego. We simply need to build more housing."
The lowest home price increases in the nation were in Chicago at 2.6 percent and Washington, D.C., at 2.4 percent.
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