San Diego home price increases outpace nation, most U.S. cities

San Diego had the third highest annual home price increase in the nation in August, a distinction not reached since 2014, said a top real estate index released Tuesday.

San Diego County home prices have risen 7.8 percent in a year, said the S&P Case-Shiller Indices, which are adjusted for seasonal swings. Only Seattle and Las Vegas had bigger increases in the 20-city index.

In the last two years, the San Diego region has averaged around 10th place in the index, making August’s jump noteworthy to industry watchers. San Diego’s yearly increases outpaced the nationwide gain of 6.1 percent and the rest of California.

“San Diego clearly, suddenly, jumped into the big leagues,” said David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices.

The indicies go beyond just looking at the median home price of a region, evaluating home transaction prices to track repeat sales of identical single-family houses as they turn over through the years.

Cheryl Young, senior economist at Trulia, said San Diego’s housing market is affected by lack of available homes for purchase, but also its ranking could be affected by other markets experiencing changes. For instance, Dallas has seen its year-over-year increases slow as Texas home building alleviates some demand.

Also, she said other cities that have dominated the top of the list — besides Seattle — are finally cooling down after months of big jumps.

“We’ve seen San Diego tracking up on the index for the past several months,” she said. “San Diego hasn’t quite reached the same pre-recession peak from the index quite yet. Whereas other places in California, like San Francisco, already have.”

Seattle had the biggest yearly increase at 13.2 percent, followed by Las Vegas at 8.6 percent. Los Angeles and San Francisco had 6.1 percent increases.

The lowest increases were in Chicago at 3.7 percent and Washington, D.C., at 3.4 percent.

August was a landmark month for national home prices as many cities hit new highs and the 6.1 percent total gain was more than the 5.8 percent increase expected by economists polled by Reuters.

Zillow chief economist Svenja Gudell wrote in an email that the U.S. homeownership rate rose slightly in the second quarter of 2017 (63.7 percent, up from 62.9 percent the year before), which showed potential buyers were tenacious and resourceful. But, she said low home inventory across the nation has made the summer difficult for many home shoppers.

“Saving a suitable down payment, especially as home prices skyrocket in the most popular markets,” she wrote, “can still feel like trying to hit a target moving impossibly fast for many would-be buyers, especially to those with already lean budgets.”

The median home price in San Diego County was $535,000 in September, CoreLogic reported last week.

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S&P CoreLogic Case-Shiller Indices for August 2017

Yearly increases by city

Seattle 13.2 percent

Las Vegas 8.6 percent

San Diego 7.8 percent

Denver 7.2 percent

Detroit 7.2 percent

Portland 7.2 percent

Dallas 7.1 percent

Boston 6.9 percent

Charlotte 6.8 percent

Tampa 6.8 percent

Los Angeles 6.1 percent

San Francisco 6.1 percent

Phoenix 5.8 percent

Minneapolis 5.6 percent

Atlanta 5.4 percent

Miami 4.9 percent

Cleveland 4.4 percent

New York 4.4 percent

Chicago 3.7 percent

Washington D.C. 3.4 percent

phillip.molnar@sduniontribune.com (619) 293-1891 Twitter: @phillipmolnar

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