Home prices is San Diego County declined by 0.7% in June in the first drop since the runup in prices began during the coronavirus pandemic, according to the authoritative Case Shiller index released Tuesday.
The decline was a general phenomenon in the West, with the Denver, Los Angeles, Portland, San Francisco and Seattle markets also experiencing a drop in home prices in June. The fall in prices ranged from 0.1% in Denver to 1.9% in Seattle.
San Diego prices had risen 0.5% in May and despite the June decline are still up 21.6% over the past 12 months.
“The deceleration in U.S. housing prices that we began to observe several months ago continued in June 2022,” said Craig J. Lazzara, managing director at S&P Dow Jones Indices.
But he noted that outside of the West, prices were not declining and overall “the market’s strength continues to be broadly based” with a nationwide increase of 0.6% in June.
Zillow was less optimistic, with economist Nicole Bachaud noting that with mortgage rates rising “affordability challenges ravaged home buyer demand in June as the cost became too much of an obstacle for many buyers.” She described the trend as a necessary move toward a “rebalanced” housing market.
“Even in markets that are seeing falling prices on a monthly basis, the dips are nowhere near enough to undo the rapid appreciation that occurred since the onset of the pandemic, meaning affordability remains a significant challenge,” Bachaud said.
“By the same token, homeowners aren’t at risk of seeing their equity depleting,” she added.