San Diego home prices rise 8% in October
Daily Transcript Staff Report
San Diego County home prices experienced an 8 percent year-over-year increase in October, according to the latest CoreLogic report.
Nationally, the real estate data company found home prices rose 7 percent year-over-year in October.
Looking ahead, the CoreLogic Home Price Index Forecast indicates that prices will increase by 4.2 percent nationwide by October 2018.
The CoreLogic HPI Forecast uses values derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
“Single-family residential sales and prices continued to heat up in October,” CoreLogic chief economist Frank Nothaft said in a statement. “On a year-over-year basis, home prices grew in excess of 6 percent for four consecutive months ending in October, the longest such streak since June 2014. This escalation in home prices reflects both the acute lack of supply and the strengthening economy.”
According to CoreLogic’s Market Condition Indicators (MCI) data, 37 percent of the top 100 metropolitian areas in the United States had an overvalued housing stock in October while 26 percent were undervalued.
When looking at just the top 50 metro markets based on housing stock, 50 percent were overvalued, and only 14 percent were undervalued, according to CoreLogic.
The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.
CoreLogic stated that the home price increase is much a double-edged sword.
“The acceleration in home prices is good news for both homeowners and the economy because it leads to higher home equity balances that support consumer spending and is a cushion against mortgage risk,” CoreLogic President and CEO Frank Martell said in a statement. “However, for entry-level renters and first-time homebuyers, it leads to tougher affordability challenges.”
According to the CoreLogic Single-Family Rent Index, rents paid by entry-level renters for single-family homes rose 4.2 percent from October 2016 to October 2017. Single-family rent growth only rose 2.7 percent between October 2015 and October 2016.