San Diego’s home price growth, the highest in the nation for much of this year, has now fallen behind other metros.
The San Diego metropolitan area’s home price increased 7.19 percent annually in July, said the S&P Case-Shiller Indices report released Tuesday. New York topped the 20-city index with an 8.8 percent annual rise, followed by Las Vegas, 8.2 percent, and the metro areas in Orange and Los Angeles counties at 7.23 percent.
San Diego metro, which includes all of San Diego County, had the fastest home price growth in the nation for six months to start the year. July marks for the first time since August 2023 that San Diego was not in the top three.
America’s Finest City was not alone in a slowdown, with national home prices rising at their slowest pace in eight months. Still, nationwide home prices managed to reach an all-time high in the 27-year-old index.
Lisa Sturtevant, chief economist at Bright MLS, wrote in her analysis that it was remarkable home prices continued to rise after years of price growth and higher mortgage rates.
“Although mortgage rates continued to rise through the first half of the year,” she wrote, “eager buyers competed over limited inventory driving home prices higher. Multiple offers and offers above list price were common.”
With mortgage rates continuing to fall, Sturtevant said conventional wisdom says home prices would go up if more people enter the market. “But conventional wisdom hasn’t been holding true in this unusual market,” she added.
On the last day of July, the average interest rate for a 30-year, fixed-rate mortgage was 6.78 percent, according to Freddie Mac, down from the high point of 7.22 percent this year in May. The average rate was down to 6.18 percent by Tuesday morning, said Mortgage News Daily.
The Case-Shiller Indices track repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The median resale single-family home price in the San Diego metro was $980,000 in July.
July was unique in the story of San Diego County’s seemingly unstoppable home price growth: The number of homes for sale, 5,260, was at its highest point of the year. Over the last few years as the median price rose, the county was hovering around 2,900 to 3,500 homes for sale.
Few homes for sale means more competition and bidding wars, which is why experts in July said increased inventory was a reason for prices to decline. Inventory has started to fall again, around 5,000 homes for sale in the past few weeks.
Not all metro areas are seeing large price gains. Portland was up 0.84 percent in a year, and Denver was up 1.3 percent.
Orange and Los Angeles counties typically follow a similar trajectory as San Diego. However, it has been a while, June 2023, since that area saw prices go up faster.
Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said data showed the lower-priced homes rose in value more quickly than high-end properties in markets like Atlanta and Tampa.
“The relative outperformance of low-price-tiered indices has both benefited first-time homebuyers,” he wrote, “as well as made it more difficult for those looking for a starter home.”
Luke said the opposite is happening in California, with the most costly properties seeing the biggest gains.
“The rich are getting richer in San Diego, Los Angeles (Orange County), and San Francisco,” he wrote, “where their high-price-tiered indices outperformed on a one- and three-year basis.”
Annual price growth by metropolitan area
S&P/Case-Shiller Home Price Index, July 2024
New York: 8.76 percentLas Vegas: 8.24 percentLos Angeles and Orange counties: 7.23 percentSan Diego: 7.19 percentCleveland: 6.97 percentChicago: 6.67 percentDetroit: 6.65 percentBoston: 6.46 percentMiami: 6.46 percentSeattle: 6 percentCharlotte: 5.83 percentWashington, D.C.: 5.53 percentAtlanta: 4.49 percentSan Francisco: 3.38 percentPhoenix: 2.88 percentTampa: 2.24 percentMinneapolis: 2.03 percentDallas: 1.87 percentDenver: 1.32 percentPortland: 0.84 percent