The widely followed Case-Shiller Index of home prices showed a slowdown in August, but the San Diego area still ranked 2nd nationally in the level of increase over the past 12 months.
Local prices rose 0.5% in August, down from the 1.6% increase recorded in July. But the rise in prices over the past 12 months still totals a whopping 26.2%.
“Phoenix’s 33.3% (annual) increase led all cities for the 27th consecutive month. San Diego continued in second place, but in August, Tampa edged Dallas and Seattle for the bronze medal,” said Craig J. Lazzara, managing director of S&P Dow Jones Indices.
He noted that while prices remain at an all-time high across the country, “the growth in housing prices, while still very strong, may be beginning to decelerate.”
Zillow Economist Kwame Donaldson agreed that the rate of increase is slowing.
“House price growth through August sustained July’s unprecedented velocity, but autumn’s reports indicate that the market is easing off the gas pedal,” said Donaldson. “While house price appreciation will remain elevated for the next several months, further acceleration is unlikely.”
He attributed the slowdown to federal fiscal and monetary policy that is less favorable to buyers,
Lazzara said the big increase in prices over the past year was due to people moving from urban apartments to suburban homes amid the pandemic. But he added that it isn’t clear whether this is a permanent shift in housing preferences.