Modest Real Estate Gains In July Around San Diego
When the San Diego real estate market bottomed out in 2008, home prices took a significant hit. Since that time, the market has been on the way up again, making impressive gains in recent years. However, new data suggests that this trend is starting to even out once more.
The new data comes from the S&P/Case-Shiller Home Price Index, which looks carefully at real estate markets across the country. When comparing home prices in July 2014 with home prices in July 2013, there was only an 8.3 percent gain. This modest number is contrasted with a 10.2 percent gain in June. Moreover, the data shows a clear slowdown in home prices dating all the way back to 2013.
This seems somewhat unusual, given that July is prime buying season in San Diego. Moreover, the market has been tighter in recent years, meaning that there is more competition that skews the market in favor of sellers. However, even with this shift, the numbers have been somewhat soft for home prices in the area.
Even so, many experts are not concerned. In fact, this slowdown of appreciated value is actually to be expected and a sign of normalization in the market. Prior to 2013, the market was flooded with foreclosed properties, which meant that home prices could only go up. With fewer such properties on the market, prices rose dramatically before starting to even out more in 2014.
While the numbers are still softer than expected, home prices are still on the climb, rising faster than the rate of inflation throughout the country. It is also worth noting that continued gains above 10 percent simply are not sustainable over the course of several years. More moderate gains are better for the market in the long term in order to prevent another housing crisis.
This trend was clear in other parts of the country as well. Of the 20 cities looked at by the S&P/Case-Shiller Home Price Index, 19 show a similar slowdown with the exception of Cleveland. In fact, despite the modest gains, San Diego still ranked fifth in the index, behind other markets like Miami, Detroit, San Francisco and Las Vegas.
It is good to note that even with the modest growth, there were other signs of improvement in the market. More people are showing interest in buying and selling, which suggests growing confidence in the San Diego market.
Source: The San Diego Union-Tribune
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