Home prices in San Diego rose two-tenths of a percent in October as real estate prices nationally reached a new high, according to an influential report released Tuesday.
The widely-followed Case-Shiller Index showed the increase in the San Diego metropolitan area matched the national average in October, but was a littler higher over past 12 months — 5.9 percent versus 5.6 percent nationwide.
While local prices are still growing strongly, San Diego no longer ranks near the top. Seattle, Portland, and Denver reported the highest year-over-year gains, with increases of 8 percent to 10 percent or more.
“Home prices and the economy are both enjoying robust numbers,” said David M. Blitzer, managing director of S&P Dow Jones Indices. “However, mortgage interest rates rose in November and are expected to rise further as home prices continue to outpace gains in wages and personal income.”
He cautioned that that “home prices cannot rise faster than incomes and inflation indefinitely.”
The online real estate website Zillow said that while recent price increases recall the housing bubble of a decade ago, there’s little comparison to what happened then.
“A decade ago, growth in the housing market was driven primarily by loose and predatory lending, speculation and over-building — forces that only served to artificially inflate and overheat the market,” said Dr. Svenja Gudell, Zillow’s chief economist.
“The growth we’re seeing today is, instead, a natural reaction to basic economic fundamentals,” she said. “More and better opportunities for American consumers means high demand for housing, and that demand is not being met by an adequate supply of homes for sale — and so prices rise.”
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