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San Diego Home Prices at All-Time Highs: Case-Shiller Index

Local market is one of hottest in country, according to latest S&P CoreLogic Case-Shiller Index report

Home prices in San Diego rose nearly 26%, year over year, according to the Corelogic Case-Shiller Index.

While the latest figures for annual national home prices beggar the imagination — an increase of 18.8%, year over year — the latest spike in San Diego’s housing market in December 2021 defies logic, or in this case, the CoreLogic Case-Shiller Index report.

San Diego sits toward the top the index’s 20-city composite, exceeded only by Phoenix, Tampa, Miami and Dallas. Between December 2020 and December 2021, the annual home price in San Diego gained a whopping 25.9%. For their part, Phoenix posted a 32.5% surge, while Tampa’s rose 29.4%, Dallas with 26.0% and Miami at 27.3%.

The only other California city in the 20-city composite is Los Angeles, where home prices shot up a gravity-defying 19.3%.

In November 2021, San Diego detached single-family home prices grew 24.4% year over year, so December’s spike represents an additional 1.5%, month over month.

According to Investopedia, the index does not track condo, co-op or other sales: “These are transactions where the home was sold at market value and the sale price data can be used to get an accurate snapshot of the housing market.”

“This is the highest calendar year increase in 34 years of data and substantially ahead of 2020’s 10.4% gain,” Craig J. Lazzara, managing director at S&P Dow Jones Indices, said regarding the 20-city composite index gain of 18.8% for 2021.

The 10-year index from CoreLogic for San Diego states that homeowners in the city have seen an annualized 9.55% return on their property investments. To put the latest numbers in context, the S&P CoreLogic Case-Shiller San Diego Home Price NSA Index Level in December 2011 was was 150.42, while December 2021 stands at a level of 374.48.

Lazzara said prices in all 20 cities, including San Diego, are at all-time highs.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic,” Lazzara said.

Other theories for soaring home prices include hedge-fund investments in residential markets and tightening availability as the pandemic prompted some prospective sellers to stay out of the market,

The S&P Dow Jones Indices managing partner added that he expects to soon detect an effect on home prices caused by an increase in mortgage rates.

Remarkably, the latest figures from CoreLogic represent a cooling off of sorts for the local and national markets, which, in August, posted a year-over-year increase of 26.2% in San Diego. Nationally, that figure was 19.7%, year over year.

“We have noted that for the past several months, home prices have been rising at a very high but decelerating rate,” Lazzara said. “The deceleration paused in December, as year-over-year changes in all three composite indices were slightly ahead of their November levels.”

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