San Diego County's housing market in December grew more slowly than the national average, reflecting a trend of decelerating price increases since the start of 2016, said the S&P CoreLogic Case-Shiller Indices released Tuesday.
The regional index of home prices, adjusted for seasonal swings, was up 5.4 percent in December compared to a year ago. It rose 5.8 percent nationwide.
While San Diego's increase was still higher than many major cities — Chicago, Phoenix and others — it was below year-over-year jumps at the start of 2016.
In January, the San Diego index had risen 6.9 percent in the 12-month period. The growth rate stayed above 6 percent until the end of summer, when the increases began to slow.
San Francisco had the biggest December escalation in the Golden State of 5.7 percent year-over-year growth. Los Angeles County grew at the same rate as San Diego County, 5.4 percent.
The change in fortunes for Southern California was not an isolated event. Half of the 20 cities studied by the index in December had higher year-over-year gains at the start of 2016 than the end.
Aside from Seattle, the markets with the biggest gains since the start of the year were in places with lower median home prices, such as Tampa, Minneapolis, Charlotte, Chicago and Cleveland.
The change could be a reflection of higher mortgage rates since Donald Trump's election victory. Markets with higher home prices are hit harder by rate increases.
Mark Goldman, a finance and real estate lecturer at San Diego State University, said affordability constraints are pushing down prices in San Diego even as a lack of home homes for sale is driving them up.
"I think 5.4 percent is sustainable rate of appreciation," Goldman said, "in contrast to 10 to 12 percent per year. It's safer."
David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, wrote in the report that although prices increased in all 20 cities studied this year, it was not remarkable in the historic sense.
When adjusted for inflation, the index's nationwide annual increase of 5.8 percent would be 3.8 percent. Since 1975, the average pace has been 1.3 percent annual growth.
"Home prices are rising, but the speed is not alarming," Blitzer wrote.
Seattle had the biggest yearly increase in the index at 10.8 percent. It was followed by Portland at 10 percent and Denver at 8.9 percent.
The lowest increases were in Washington, D.C., at 4.2 percent and New York at 3.1 percent.
Lawrence Yun, chief economist for the
"Such a trend of price growth outpacing incomes is not healthy nor sustainable," he wrote. "Only an increase in inventory can soften the price pressure. Any impediments to new home construction need to be re-examined and possibly removed soon."
The median home price in San Diego County was $495,000 in December, CoreLogic said. The Case-Shiller index goes beyond evaluating home transaction prices to track repeat sales of identical single-family houses as they turn over through the years.