Home sold in Encinitas
A newly sold home in Encinitas. REUTERS/Mike Blake

San Diego home prices rose 0.7% in July and are higher than a year ago for the first time in months as the real estate market continues to improve, according to the authoritative Case-Shiller Index.

“U.S. home prices continued to rally in July 2023,” said Craig J. Lazzara, managing director at S&P Dow Jones Indices. “The increase in prices that began in January has now erased the earlier decline, so that July represents a new all-time high.”

However, prices remain below previous levels in many Western markets, including Phoenix, Las Vegas, San Francisco and Seattle.

“On a year-over-year basis, the revenge of the Rust Belt continues,” Lazarra said. “The three best-performing metropolitan areas in July were Chicago (+4.4%), Cleveland (+4.0%), and New York (+3.8%).”

San Diego prices transitioned from a year-over-year decline to a 0.7% increase in July. Los Angeles also moved to the positive category with a 0.4% year-over-year increase.

Zillow Senior Economist Nicole Bachaud attributed rising prices to continued lack of inventory.

Despite affordability concerns, stubborn inflation and stretched budgets from consumers, home prices continue to rise,” she said. “Low inventory has been much to blame for the sustained upward pressure on prices, and there are no signs pointing to significant inventory growth any time soon.”

Chris Jennewein is Editor & Publisher of Times of San Diego.