Experts say that rising home prices slowed across the nation and mortgage rates increased. The most expensive markets are seeing the biggest slowdown. We can compare San Diego to other big dogs like Los Angeles and San Francisco where the metro index rose 2.9% and 1.8%.
On the other hand, we are seeing low-cost markets with the biggest gains: Las Vegas was up 10.5%, Phoenix was up 7.5% and Minneapolis was up 5.1%. According to David Blitzer, managing director of the index. “In 16 of the 20 cities tracked, price gains were smaller in January 2019 than in January 2018,” some cities were prices surged in 2017 to 2018 now face much smaller increases.”
Steven Thomas, founder of Orange County-based Reports on Housing says West Coast markets were hit especially hard by rising mortgage rates because already high prices meant small interest rate changes were devastating for some potential buyers. He said a rocky stock market and fear of an upcoming recession all played into slowdowns.“People were not in a rush to go purchase something,” Thomas said. “It was just really slow toward the end of the year, which meant January and February closed sales were off compared to last year.”
The average interest rate for a fixed-rate, 30-year loan last year at this time was around 4.5 percent, said Mortgage News Daily. It reached 5.05 percent in November and was back down around 4.1 percent earlier this week. Thomas said the market was already showing some signs of bouncing back with lower interest rates.
The San Diego Regional Chamber of Commerce said the slowdown in the real estate market has yet to make the region more affordable.
“It’s encouraging that home prices aren’t rising as quickly as they once were,” said Sean Karafin, a vice president with the chamber, in a statement. “But our region is still burdened by costly housing that leaves San Diegans financially squeezed and with limited options.” Nationwide, home prices were up 4.3 percent annually in January. It was the smallest gain in nearly four years.
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S&P CoreLogic Case-Shiller Indices for January 2018
Yearly increase by city
- Las Vegas — 10.5%
- Phoenix — 7.5%
- Minneapolis — 5.115%
- Tampa — 5.107%
- Charlotte — 5.103%
- Denver — 5%
- Detroit — 5%
- Atlanta — 4.9%
- Miami — 4.8%
- Boston — 4.6%
- Seattle — 4.1%
- Cleveland — 3.8%
- Dallas — 3.8%
- Portland — 3.3%
- Washington, D.C. — 3.1%
- New York — 3%
- Los Angeles — 2.9%
- Chicago — 2.4%
- San Francisco — 1.8%
- San Diego — 1.3%
- Nationwide — 4.3%
