After months of increases, home prices in San Diego took an unexpected dip in November, according to the widely-followed Case-Shiller Index.
The report released Tuesday showed a 0.3 percent drop in November after no change in October.
Still, San Diego prices were 7.4 percent higher in November than a year ago, and the region ranked in the top four along with Seattle at 12.7 percent, Las Vegas at 10.6 percent and San Francisco at 9.1 percent.
The average increase in home prices across the nation was 0.2 percent in November and 6.2 percent percent for the past year.
“Home prices continue to rise three times faster than the rate of inflation,” said David M. Blitzer, managing director at S&P Dow Jones Indices. “Case-Shiller National Index year-over-year increases have been 5 percent or more for 16 months.”
He said the cause of the increase was not high demand or rising construction costs, but sluggish home building.
“From 2010 to the latest month of data, the construction of single family homes slowed, with single-family home starts averaging 632,000 annually,” he noted. “This is less than the annual rate during the 2007-2009 financial crisis of 698,000, which is far less than the long-term average of slightly more than one million annually from 1959 to
2000. Without more supply, home prices may continue to substantially outpace inflation.”
Zillow Senior Economist Aaron Terrazas agreed that despite high demand by the nation’s” large and aging millennial population,” lack of new construction is slowing sales.
“What’s been missing from the housing mix so far is homes actually available to buy in numbers sufficient enough and at prices accessible enough to meaningfully meet this red hot demand,” he said. “More supply will be critical to the continued health of the housing market going forward.”