San Diego County home prices rise in September 2019, easing fears of a downturn

San Diego area home prices ticked up 2.8 percent annually in September 2019, perhaps signaling that fears of a looming housing slowdown earlier this year were overblown.

The S&P CoreLogic Case-Shiller home price index — a leading measure of U.S. home prices — found that the September year-over-year home price gains in San Diego mirrored the trend nationally.

Case-Shiller data released at the end of November 2019 put overall home price increases across the United States at 3.2 percent in September compared with the same month last year. Phoenix led the way for September with 6 percent annual gain. Charlotte hit 4.6 percent and Tampa posted a 4.5 percent increase.

“September’s report for the U.S. housing market is reassuring,” said Craig Lazzara, managing director and global head of index investment strategy for S&P Dow Jones Indices. “After a long period of decelerating price increases, it is notable that in September both the national and 20 city composite indices rose at a higher rate than in August.

”It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend,” he added.

In August, the San Diego region’s home prices rose 2 percent year-over-year.

But for months before that, annual gains languished at around 1 percent — well off the pace seen over the past couple of years.

Current mortgage interest rates are near historic lows. That should keep the housing market in positive territory into next year, especially with the looming presidential election, said Nathan Moeder, principal at real estate and economic policy consulting firm London Moeder Advisors.

“Right now, we’re back in a seller’s market rather than a buyer’s market” in San Diego, he said. “It went to a buyer’s market for a little bit, where you saw price reductions because agents were pushing the limits and trying to put the biggest price out there.”

Now, agents are being less aggressive with listing prices, said Moeder. “It’s a seller’s market because they’re more appropriately priced.”

The S&P/Case–Shiller U.S. national home price index is a composite of single-family home price indices for the nine U.S. Census divisions.

In Southern California and San Diego, however, fewer single-family homes are being built as policymakers prioritize dense condo and apartment projects, said Moeder.

“It is a housing bet. We are betting we are going to build flats and that is going to be enough for people in the future,” he said. “All the research that I have done doesn’t indicate that. We’ll see what happens.”

In September, Case-Shiller found only one city in the 20-City Composite Index — a subset of the national index that includes large metro areas — posted a year-over-year home price decline.

That was San Francisco, which saw prices dip 0.7 percent compared with a year ago.

Los Angeles and Seattle posted 1.7 percent year-over-year-gains. Dallas and Denver hit 3 percent. Las Vegas came in at 2.9 percent, while Portland reached 2.7 percent.

The recent Case-Shiller data points to stabilization in home prices rather than any kind of prolonged slowdown or damaging housing slump that was feared earlier this year, said Matthew Speakman, an economist for online property listing firm Zillow.

Annual home price growth nationally is near its long-term historic average. “This return to a more steady-as-she-goes kind of market is likely to benefit both buyers and sellers in the longer term,” he said.