San Diego home prices continued their downward trend in December, declining by 1.3% for the seventh straight monthly pullback, according to the authoritative Case-Shiller Index released Tuesday.
Local home prices are now just 1.6% higher than a year ago, with the possibility of further declines in the months ahead.
The average decline nationwide in December was 0.8% and prices remain 5.8% higher than a year ago.
“The cooling in home prices that began in June 2022 continued through year end,” said Craig J. Lazzara, managing director of S&P Dow Jones Indices, noting that prices fell in all of the 20 largest metropolitan areas.
“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers,” he said. “Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
Zillow‘s Senior Economist Nicole Bachaud echoed that assessment, saying that “any momentum in this market will be short lived.”
“Buyers and sellers ended the year on a discouraging note, with sales declining as mortgage rates soared, new listings sputtered out and active inventory pooled up as homes stayed on the market longer,” she said.