Home prices in the San Diego region rose an astonishing 3.2% in March and are up 19.1% over the past 12 months, according to the authoritative Case-Shiller Index released Tuesday.
The March increase was higher than February’s 2.9% and tied for third place nationally with San Francisco. For the year, San Diego’s increase was second after Phoenix.
By comparison, the national average was 2.0% in March and over the past year 13.2% — the biggest jump since 2005.
“Housing prices continued to rise robustly in March 2021,” said Craig J. Lazzara, managing director S&P Dow Jones Indices. “Phoenix’s 20.0% increase led all cities for the 22nd consecutive month, with San Diego (+19.1%) and Seattle (+18.3%) close behind,”
“Although prices were strongest in the West (+15.1%) and Southwest (+14.8%), every region logged double-digit gains,” he said.
Lazarra said the price increases are likely due to city residents buying up suburban homes amid the COVID-19 pandemic, but he added that it isn’t clear whether this heralds a long-term trend.
“These data are consistent with the hypothesis that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” he said. “This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years. Alternatively, there may have been a secular change in preferences.”
Zillow economist Matthew Speakman said the “torrid pace” of home price increases appears likely to continue as the economy improves and buyers face competition for the relatively few homes available.
“The combined dynamic is pushing prices upward at their strongest pace in years, and it doesn’t appear that there is an end in sight,” Speakman said.