Area one of stronger markets 2009 to 2010
WEDNESDAY, MARCH 31, 2010 AT 12:04 A.M.
Strongest markets
One-month change in home prices
Los Angeles 0.9%
SAN DIEGO 0.4%
Miami -0.2%
New York -0.3%
Washington -0.4%
SOURCE: Standard & Poor’s
After perking up last summer and fall, home prices in San Diego and across the country have hit a winter lull.
The latest reading from the S&P/Case-Shiller Home Price Index yesterday showed San Diego County prices up 0.4 percent in January, the fourth straight gain of half a percentage point or less. That compares with monthly gains as big as 2.5 percent last summer.
And San Diego was one of the stronger markets in the January report, with prices falling in 18 of the 19 other markets the index tracks. Only Los Angeles also showed a gain. A nationwide index of 20 cities fell 0.4 percent.
“The report is mixed,” S&P index chairman David M. Blitzer said. “While we continue to see improvements in the year-over-year data for all 20 cities, the rebound in housing prices seen last fall is fading.”
Any improvement is welcome after local prices plunged 42 percent from their October 2005 peak through last April. Since then, prices have bounced back 9 percent by S&P’s measure, bringing them back roughly to where they were in early 2003.
But most of that gain happened during the summer selling season through August. That paralleled the nationwide trend, as prices jumped last summer before recently showing slight declines.
“We are in a seasonally weak part of the year,” Blitzer said. “But given the data reported today, we can’t say we’re out of the woods yet.”
San Diego prices were up 5.9 percent in January compared with a year earlier, with only San Francisco showing a larger gain, at 9.0 percent. The nationwide index was down 0.7 percent year-to-year, but that was the smallest drop since January 2007.
The housing market continues to fall in some areas of the country, with Las Vegas, Seattle, Tampa, Fla., and Charlotte, N.C., hitting new lows for the current slump. Prices in the weakest market, Las Vegas, are down 55.8 percent from their high point.
The strongest rebounds have been San Francisco and Minneapolis, up 15.2 percent and 12.9 percent from their low points, respectively.
Norm Miller, a vice president at the CoStar Group in San Diego, said prices could well perk up again this spring. Mortgage rates are relatively low, and a federal tax credit could lure buyers into the market.
But Miller said this wouldn’t signal a sustainable trend, as he said weakness in the general economy along with potentially higher mortgage rates will likely keep prices relatively flat for some time.
“The biggest problem we have is unemployment,” he said. “The other problem we have to keep in mind is that things would have been much, much worse if mortgage rates weren’t historically low.”
Indeed, rates that have been below 5 percent on 30-year fixed-rate mortgages in recent weeks are already rising, and Miller said that could continue as the Federal Reserve prepares to end a program of buying up mortgage bonds that has helped prop up the market. Miller said that alone could boost rates by 0.3 to 0.4 percentage points.
Likewise, he said, with the latest reading of San Diego’s unemployment rate at 10.6 percent, a lot of people aren’t in a position to buy a home.
“Consumers know it’s not a bad time to buy,” Miller said. “You can’t do that if you don’t have a job.”
The S&P index uses a methodology that aims to estimate the change in actual home values by tracking the prices of individual homes that sell more than once over time. The idea is to avoid a problem with the more common methodology, median prices, which can be skewed by changes in the mix of properties that sell.
But a local measure of median prices from MDA DataQuick, which also showed big gains last summer, has been flattening out in recent months. That measure, which is a month ahead of the S&P report, showed a San Diego County median price of $322,000 in February, down 2 percent from $330,000 in December.
