San Diego County housing prices rose again in October, but the pace of growth continued to slow.
The S&P/Case-Shiller Home Price Index showed Tuesday that from September to October, the index grew 0.3 percent. That’s down from the 0.9 percent gain from August to September, and the 1.8 percent boost from July to August.
“We’re in a slowing appreciation environment,” said Michael Lea, a real estate professor at San Diego State University. “That kind of reflects the market fundamentals that we see.”
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Lea said although low inventory and fewer distressed sales are putting upward pressure on home prices, there’s a slowdown in demand, which is partially seasonal and also because interest rates have ticked up.
“Those factors have been in place for the last few months and I expect them to continue into spring,” Lea said.
The index compares repeat-sales prices of single-family homes. In October, it reached 194.07 for San Diego County, a 19.7 percent gain from October 2012. In September, the annual gain was 20.9 percent.
Lea said the market is returning to normal year-over-year appreciation levels, which he considers for San Diego to be in the 5 to 6 percent range. Annual 20 percent price gains are unsustainable and could lead to a bubble, he said.
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