Great News! San Diego housing prices up 4.6% in June!

San Diego County's upward housing price trends match national figures, theS&P/Case-Shiller reported Tuesday.

The June home price index, which tracks same-house sales over time, was up 4.5 percent nationally and 4.6 percent locally from the same month last year.

David Blitzer, S&P's managing director and chairman of S&P's index committee, discounted any spillover effect on housing from the currently volatile stock market, at least for now. Since last Tuesday, the S&P 500 stock index has dropped 10.9 percent.

"A stock market correction is unlikely to do much damage to the housing market," Blitzer said in a statement. "A full-blown bear market dropping more than 20 percent would present some difficulties for housing and for other economic sectors."

The housing index, which was set at 100 for all metros as of January 2000, stood at 212.34 for San Diego in June, meaning that average prices were more than double the 2000 levels. During the real estate runup a decade ago, San Diego's index rose to a peak of 250.34 in November 2005 and then fell back to 144.43 in April 2009 before starting a slow recovery. That means

Of the 20 metros, only Dallas and Denver have surpassed their previous peaks. Boston, San Francisco and Charlotte, N.C., are the closest to breaking their previous records.

S&P analyst Craig Lazzara said the biggest influence on housing recovery is how much markets fell during the recession. Those that fell the most, Las Vegas and Phoenix, still have the furthest to go.

"One of the things that drives the price of houses is competition from rentals," he added. "If there are lots of rentals and it's easy to rent a nice apartment and have a lot of choices, there's less incentive to pay for a house. If it's very tight and expensive, then you have more incentive to buy a house."

Lazzara said the roughly 5 percent annualized price appreciation rate represents a "sustainable" level. Even if it is about double the inflation rate, it is not in "bubble" territory, he said.

In reaction to the stock market's gyrations, Lazzara said anyone contemplating a home purchase should not have down payment funds invested in stocks.

"The chance of losing money is somewhat less good than making money," he said. "If you really need the money, you shouldn't be doing that (stock investing) in the first place."

Mark Goldman, a real estate agent, loan officer and lecturer at San Diego State University, called the housing market "steady and strong" and heading toward a likely 3.5 percent annualized price rise. He said interest rates have not changed markedly with the stock changes — rising or falling only about one-eighth of a point from day to day.

"The economy is not on fire but it is doing well and in general I think more people think it's improving rather than deteriorating," Goldman said, "and consequently more people are willing to come into the home-buying market."

He said some high-income buyers may pause before they enter a multi-million-dollar purchase if their stock portfolio takes a big hit. But sometimes they can time the market perfectly.

Just last week, he advised a client to pull about $250,000 out of investments to get ready to close a deal. That turned out to be a good guess.

"Was that a good call or what?!" he said. "I wish I could take credit for being that knowledgeable."

Goldman does not profess to know the ins and outs of stocks, but he said first-time home buyers might want to wait a few days to see if the market settles down before making a purchase.

San Diego Union Tribune

By Roger Showley | 3:41 p.m. Aug. 25, 2015