Home prices in San Diego County climbed in May but at less than half the pace they did a year earlier.
Last month, the median price for a home sold in the county was $440,000, a nearly seven year high that is up 8.2 percent from $406,500 in May 2013, real estate tracker DataQuick reported Wednesday. However, that appreciation rate pales in comparison to the 21.3 percent gains seen from May 2012 to May 2013, the midst of the housing recovery. The county is now on the brink of hitting its lowest year-over-year appreciation in home prices since 7.9 percent in August 2012.
“The sort of price spikes we saw this time last year – annual gains of 20 percent or more – are less likely today given affordability constraints, higher inventory and the drop-off in investor purchases,” DataQuick analyst Andrew LePage said in a statement.
The higher median prices are also dampening sales. In May, 3,654 transactions closed, 10 fewer than in April. Typically, activity jumps in the spring and summer months, which are considered peak buying season. In May 2013, there were 4,236 transactions, 444 more than in April 2013.
“This year just isn’t rolling as fast, things are leveling off,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “We’re entering into a period of a stable market that’s experiencing some sort of equilibrium. There are no particular forces that are creating incentives for sellers to sell or buyers to buy.”
Interest rates are still low — the average in May for a 30-year fixed was 4.19 percent — but Goldman noted that household incomes are flat, which hurts affordability. Inventory, still low by historical standards, hit 7,000 active listings in May for the first time since March 2012, the San Diego Association of Realtors reported separately.
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