Home prices in San Diego County began to flatten out this summer, but their jump over the past 12 months is the largest in any yearlong period since March 2005, the S&P/Case-Shiller Home Price Index showed Tuesday.
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Home prices in the county rose 20.4 percent from July 2012 to July 2013, trailing just three other cities included in Case-Shiller’s 20-city index. San Diego beat the national average of 12.4 percent.
But from June to July, prices grew 2 percent, which is a decline from the 2.8 percent they rose from May to June, according to the index, which lags two months.
David Blitzer, chairman of the index committee at S&P Dow Jones, said an increase in interest rates in May could be a reason for housing demand to decline. All 20 cities on the index saw monthly increases, but 15 of those gains were smaller from the month before.
“More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked,” he said in a statement. Blitzer noted that the Federal Reserve’s announcement last week that it would not begin to taper its stimulus program that keeps long-term interest rates low could provide a temporary boost to the housing market.
The average 30-year fixed mortgage rate was 4.5 percent, as of July 11, Freddie Mac reports. That’s up from 3.3 percent the week of May 2.
But rates are still low by historic standards, and therefore are keeping demand artificially high, said Michael Lea, a real estate professor at San Diego State University. The supply of housing is constrained because a lot of people are still underwater on their home mortgages, he said.
“If you had a normal amount of supply on the market with the given demand, you would not be seeing such hefty price increases,” Lea said.
Lea said the peak buying season ends this time of year, so he expects the market has reached its limit for the current period.
Across the country, the biggest jump in the Case-Shiller index came in Las Vegas, which saw its index increase 27.5 percent from July to July. San Francisco came in second with a 24.8 percent increase, while Los Angeles came in third, one spot ahead of San Diego, at a 20.8 percent year-to-year jump.
The index works by comparing repeat-sales prices of single-family homes.
DataQuick, another home-price monitor, reported that the median price in August was $415,000, down from $417,500 in July. But it’s still up 20.2 percent from year-ago levels.
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