The monthly S&P/Case-Shiller analysis, which reviews 20 major U.S. metro areas, also shows a potential rebound in once hard-hit cities such as Las Vegas and Phoenix, which led the nation with an annual gain of 23 percent.
“Home prices continue to show solid increases across all 20 cities,” David M. Blitzer, chairman of S&P’s index committee said in the report. “Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy.”
Annual prices rose in February in all 20 cities for the second month in a row. And the index for all 20 cities was up 9 percent. That’s the highest year-over-year increase for any month in about seven years.
Locally, home prices are gaining steam as a growing number of buyers are bidding on a limited supply of homes at a time when mortgage rates are at near-record lows. But the gains have been gradual. The January Case-Shiller report showed an annual increase of 9.8 percent for San Diego and in December an increase of 9.2 percent.
The index covers about half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.
But more recent housing reports show San Diego County’s market picking up, too. In March, the median price for all residential properties sold rose nearly 19 percent from a year ago to $380,000, according to DataQuick, which tracks real estate data monthly. Sales rose 16 percent from a year ago to 3,762, the best recording for a March since 2006, when about 4,300 properties were sold.
The price uptick in San Diego’s housing market could bring relief to homeowners who have been waiting to sell their home for a profit. As more of those property owners are freed from negative equity, more homes may hit the market to relieve the tight inventory level.
Until that happens, potential buyers have been grappling with a limited housing supply. There are about 4,200 listings, about 50 percent of what was for sale a year ago, based on numbers from the Greater San Diego Association of Realtors. Listings hit a peak of 13,123 in September 2010, according to the organization’s figures, which begin in 2009.
Fewer homes on the market mean increased competition between traditional buyers, and investment and vacation-home buyers, who have maintained a 31 percent share of the resale market, says real estate service DataQuick.
The competing sides have ignited bidding wars in some areas and pushed regular Joe and Jane buyers to resort to gimmicks, from submitting cover letters to going door-to-door to try to snag properties.
Nationally, 11 of the 20 cities in the Case-Shiller index reported price gains in February compared with January. Those monthly numbers are not seasonally adjusted and reflect the slower winter buying period.
Stan Humphries, chief economist at Zillow, a real estate data provider, cautioned that the national figures are being skewed by sharp rebounds in cities hit hard during the housing bust, including Las Vegas and Phoenix. Investors are helping drive up prices in those cities.
“This report needs to start being taken with a grain of salt,” Humphries said. “The appreciation rates we’re currently seeing ... are not broadly reflective of what’s happening in the national housing market right now.”
Although the latest Case-Shiller report could suggest that the housing market is rebounding, Gary Painter, a professor at USC’s Lusk Center for Real Estate, prefers the term stabilizing. Painter points out that prices, while improving, have yet to see drastic increases.
In San Diego, prices are still about 34 percent off from the peak set in November 2005. Nationally, they’re 30 percent below the peak.
“ ‘Hot markets’ are often a result of lack of inventory rather than positive market growth, which may explain the steady prices,” Painter said. “As fundamentals continue to improve, however, you will begin to see more markets gaining momentum.”
The Associated Press contributed to this report.
Written by,
Lily Leung
Lily Leung
