San Diego ranked second among the 20 largest metropolitan areas in home price increases over the past year, but the gains are slowing, according to the widely followed Case-Shiller Index.
Tuesday’s report showed that local prices have risen 27.8% over the 12 months ended in July, second only to Phoenix with 32.4%, but the monthly rate of increase declined over the past two months.
San Diego prices rose at the national average of 1.6% in July, down from the 2.5% rise in June, which was just slightly higher than the national average.
Craig J. Lazzara, managing director at S&P Dow Jones Indices, said that July was the fourth consecutive month in which the national growth rate of housing prices set a record.
But experts at the online real estate site Zillow noted a softening in the market.
“Annual growth in list prices peaked in the spring and price cuts are becoming more common. And while still-strong price growth continues to present challenging conditions for many would-be buyers, the softening market conditions do appear to be offering some home shoppers a reprieve,” said Zillow Economist Matthew Speakman.
Lazarra said the rise in prices has been driven by a reaction to the COVID-19 pandemic, with buyers moving from urban apartments to suburban homes.
“This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years,” he said. “Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift.”
