San Diego County’s home prices rose 3.32 percent in 2018, according to the latest S&P CoreLogic Case-Shiller Index, released this week. January 30, 2019
Despite not having climbed much, a member of the San Diego Regional Chamber’s infrastructure, housing and land use committee said they were already too high.
“When it comes to housing, employers in San Diego are competing with states like Texas every day,” Gilman Bishop, a principal with Bishop & Co., said in a statement. “Many employees face long commute times as they make the tough decision to move farther outside San Diego to secure the desired housing they simply can’t afford in San Diego. This hurts recruitment and retention, and makes our region less competitive overall.”
The Greater San Diego Association of Realtors (SDAR) pegged the median price of an existing single-family home at $625,000 in December, representing a 2.46 percent increase over December 2017.
While both CoreLogic and SDAR’s indexes show home prices increasing year-over-year, the rate of the hikes have slowed.
“Home prices are still rising, but more slowly than in recent months,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The pace of price increases are being dampened by declining sales of existing homes and weaker affordability. Sales peaked in November 2017 and drifted down through 2018.”
Affordability reflects higher prices and increased mortgage rates through much of last year. Following a shift in Fed policy in December, mortgage rates backed off to about 4.45 percent from 4.95 percent.
The San Diego Regional Chamber’s housing scorecard from July 2017 concluded the region is only on pace to produce half of the units needed to accommodate population growth.
The San Diego Association of Governments has reported that 150,000 residential units are needed between now and 2050 to keep up pace with the natural population increase and arrivals from elsewhere.
The S&P CoreLogic Case-Shiller Index evaluates home prices by tracking repeat sales of single-family houses as they turn over through the years.
“Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy,” CoreLogic stated. “Current low inventories of homes for sale — about a four-month supply — are supporting home prices.
“New home construction trends, like sales of existing homes, peaked in late 2017 and are flat to down since then.”
A stable 2 percent inflation, continued employment growth, and rising wages are all favorable, and measures of consumer debt and debt service do not suggest any immediate problems, according to CoreLogic.
Wednesday, January 30, 2019
Case-Shiller: Rate of home price increases slows in 2018
By Thor Kamban Biberman