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Sign the housing market has momentum heading into the summer selling season!
Home prices are back to near-record highs across the U.S. amid rising demand and supply constraints, a sign that the lopsided housing-market recovery of the past five years is gaining some strength.
Home prices were up 6.9 percent in January over the last 12 months in San Diego County, said the S&P/Case-Shiller Home Price Index released Tuesday.
National prices were up less in the same time period at 5.4 percent. The biggest gainers were Portland, Seattle and San Francisco.
From December to January, the median home price in San Diego County, adjusted for seasonal variation, increased 1.1 percent, beating the national average by 0.6 percent.
David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, said in the report that home prices nationally continue to climb at more than twice the rate of inflation. But, housing supply is still a major issue.
“While low inventories and short supply are boosting prices, financing continues to be a concern for some potential purchasers, particularly young adults and first-time homebuyers,” he wrote.
Lack of housing supply is typically cited by analysts and real estate agents as a reason for increased housing prices and rent. The latest data from the U.S. Census, from July 2014 to July 2015, showed more people left the county than moved in — and housing is considered a major factor.
San Diego had the lowest drop in home inventory, 30.2 percent, in the nation from January 2015 to January 2016, real estate tracker Zillow said.
Zillow chief economist Svenja Gudell said in a statement Tuesday that besides low inventory and problems for first-time buyers, the latest numbers pointed to a healthy economy.
“Economic growth hasn’t been overwhelming, but it has been consistent, and as long as wages and job opportunities keep rising, the housing market should remain fairly stable and healthy,” she said.
Gary Kent, a La Jolla-based real estate agent with Keller-Williams, said the lack of homes for sale has continued to make for a challenging market.
“Anything under $700,000 tends to get a lot of interest. It’s very common to get three, five or seven offers on it,” he said.
Kent said a lot of times homes are going over list price and require a lot of effort to get.
“You need to act fast, make a strong offer and don’t come in low if you want the house,” he said.
Portland’s home prices rose the most year-over-year at 11.8 percent of the 20 largest metro areas covered by the index. It was followed by Seattle at 10.7 percent; San Francisco at 10.5 percent; and Denver at 10.2 percent.
San Diego was tied in eighth place with Los Angeles at 6.9 percent, the index said.
At the bottom of the list was Washington, D.C., which rose 2.2 percent and Chicago at 2.1 percent.
SD Union Tribune 3/39/16
Older San Diegans are most likely to associate owning a home with the American dream, but younger generations do not, a Zillow study shows.
Roughly 68 percent of San Diego residents over 65 years old think homeownership is needed to achieve the American dream, the study said. Baby boomers (50 to 64 years old) and millennials (18 to 34 years old) were less likely to agree at 54 percent.
Generation X (35 to 49 years old) put more emphasis on owning a home, with 58 percent saying it was needed to gain wealth.
The study, released last week, is the result of a semi-annual U.S. Housing Confidence Survey from Zillow and Pulsenomics that asks 10,000 renters and homeowners from 20 metro areas their views on homeownership.
Possibly because of low home inventory, San Diego’s results were different from much of the nation.
For instance, nationwide results show millennials put the most emphasis, 65 percent, of any generation on homeownership as way to achieve wealth — even more than the oldest Americans.
Yet, in San Diego, millennials are more than 11 percent less likely than the national average to associate homeownership with the American dream. The study also notes a lack of confidence among millennials in their ability to buy a home. Just 2 percent of San Diego millennials said they expected to buy a home in the next year.
Mark Goldman, a loan officer and real estate lecturer at San Diego State University, said local millennials are likely influenced by high home prices.
“Housing is much more expensive here than it is in so many other markets across America,” he said. “You do see lower homeownership participation rates when you have high-cost housing.”
The study also broke down homeownership views by race.
African-American San Diegans put the most emphasis on home ownership at 58.3 percent, followed by Latinos at 57.6 percent, whites at 57.2 percent and Asians at 54.8 percent.
Zillow chief economist Svenja Gudell said in a news release that the study shows millennials and people of color will be serious home buyers in the future.
“It’s often assumed that homeownership holds little interest for these groups, or that they may feel the challenges in achieving home ownership aren’t worth the benefits,” she said. “But that’s simply not true, and their optimism and determination today will be hugely important to the stability and growth of the housing market tomorrow.”
The median home price in San Diego County reached $462,750 in January and predictions for this year say price appreciation will slow. Lawrence Yun, chief economist for the National Association of Realtors, predicted national home prices would rise 4.6 percent this year.
By Phillip Molnar San Diego Union Tribune