Standard & Poor's Case Shiller Index was just released for April. It shows San Diego houses have increased in value for each of the past 12 consecutive months, through April 30. The index is always two months behind, so that's their most recent report. So today's big news in San Diego real estate isn't really such big news. We've been talking about it for the past year.
San Diego homes were second to San Franciso in terms of appreciation. San Francisco showed a 12-month increase of 18 percent. San Diego was 11.7 percent. Minneapolis 9.5 percent. Cleveland 6.8%. Eleven of the twenty major metro areas in the US are now up for the year ending April, and nine are still down. The largest drop during that twelve month period was Las Vegas. Still falling.
I reviewed the house price index methodology and talk about it on my San Diego real estate blog. I really can't find any fault with the methodology. It's the same methodology used by the fedreal government for many real estate market studies. They compare prices of resale homes that have the same general characteristics. They attempt to exclude properties that have been improved or renovated since the last sale, and they exclude properties that have been flipped by investors. And only arm's-length transactions are considered, so houses that are transferred between family members are also excluded.
Of the twenty metropolitan areas tracked in the index, all twenty showed price increases between the March and April index. This could easily have been a runup related to the $8,000 tax credit. But San Diego is the only city that has posted increases in each of the past twelve months. Hard to believe that that's solely related to the tax credit.
No, I really think that there is sufficient demand for san diego homes to support prices at their current levels. This is particularly true at the entry level, though there's still going to be some downward pressure at the top end. I wouldn't, however, count on 11.7percent a year, and the appreciation rate will probably even drop by the end of the year. Something in the 4 to 6 percent range is much more likely.
Geoffrey Schiering (J.D./M.B.A. Broker/Realtor). San Diego homes sale leader since 1999. Specializing in San Diego luxury homes transactions in La Jolla, Del Mar, Carmel Valley and Rancho Santa Fe. The Schiering Team provides world-class service to buyers and sellers of houses, condos, and investment properties throughout San Diego County. Call 619-200-7612
