Home Prices Up, but Less Than Inflation

For the sixth consecutive year, the price of homes in San Diego County failed to match the rate of inflation, according to a study released Monday by the Greater San Diego Chamber of Commerce’s Economic Research Bureau.

The chamber’s survey, completed last month, showed that in “real” inflation-adjusted terms, the average price of a single-family, detached resale home had dropped nearly 16.7% since 1980.

Without adjusting for inflation, the average home price increased 2.1%, to $136,400, in 1985. After factoring for inflation, housing prices actually dropped slightly, the study revealed.

In the last six months of 1985, in fact, the average price of a home in the county dropped 0.3% in inflation-adjusted terms, and 1.1% in the past 14 months, the chamber said.

Despite the drop, housing remains a “good vehicle” for investment, according to Max Schetter, director of the chamber’s Economic Research Bureau.

The chamber’s survey included 50 areas within the county.

In the City of San Diego, the fastest rising home prices in the past six months were reported in Allied Gardens, at 9.4%; in the county cities, Chula Vista registered a 6.7% gain, and in the unincorporated areas, Alpine prices increased 4.5%.

DECEMBER HOME SALES IN SAN DIEGO COUNTY

Total San Diego North North County City Coast Inland Home Resales 3,055 +12.6% 950 -2.3% 412 +4.8% 672 +9.6% New Home Sales 1,783 +32.7% 424 -9.7% 608 +17.6% 483 +146.4% Defaults 719 +37.7%

South East Bay County Home Resales 272 +5.8% 495 3.6% New Home Sales 186 -31.2% 131 18.3% Defaults

Source: Safeco Title Insurance Company Percentage is the amount of increase or decrease since the same month last year.