San Diego – Why Home Appreciation Slowed in 2014
While still healthy, the pace of home-price appreciation slowed drastically for San Diego County homeowners in 2014, the S&P Case-Shiller Home Price Index showed Tuesday.
From December 2013 to December 2014, resale single-family home prices rose nearly 4.8 percent. That’s still three times the county’s current rate of inflation, but pales in comparison to the 18 percent value gains seen from December 2012 to December 2013.
The drop off occurred as the mix of resale homes returned to normal, analysts say. In other words, after the housing market crashed, homes previously foreclosed were resold, discounted by 20 percent to 30 percent. That kept prices low. Then, once fixed and sold again for market value – along with other traditional home sales – it made overall gains look quite large.
Foreclosures hit an eight-year low in 2014, so double digit value gains are no longer possible given that discounted homes are rare and wages are only growing by 2 percent or less annually.
“We’re coming through the transition and the market is stabilizing,” said Mark Goldman, a loan officer and real estate lecturer at San Diego State University. “There’s nothing in particular that’s moving the dial on the market. There’s nothing moving the market into an over speculative mode.”
Goldman said there’s some talk that interest rates will increase in the coming months, which should get some buyers off the fence.
read more at: http://www.utsandiego.com/news/2015/feb/24/case-shiller-december-housing-real-estate/
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