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Home price gains in San Diego continue to slow

Home price gains in San Diego continued to slow in October compared to most of the nation, said the S&P CoreLogic Case-Shiller Indices released Wednesday.

Of the 20 regions covered in the index, San Diego metropolitan area’s increase, up 3.8 percent in a year, was the fourth smallest gain for the second month in a row. It was also below the national increase of 5.5 percent. The last time San Diego’s home price gains were around the same level was summer 2012.

Price gains for homes have slowed across the nation, down for the third month in a row. However, other California cities continue to outpace San Diego. Los Angeles metro area’s home prices were up 5.5 percent in a year and San Francisco was up 7.9 percent.

Most analysts attribute slowing home prices to rising mortgage rates, which greatly increase costs in pricey West Coast markets.

“Home price growth continues to outstrip wage increases and advancing mortgage rates combine for menacing headwinds that impact affordability,” wrote Cheryl Young, senior economist at Trulia. “The West remains hot, but even the hottest markets are cooling.”

The indices evaluate home prices by more than just price, tracking repeat sales of identical single-family houses as they turn over through the years. It is a favorite of economists, who use it to get a more complete view of the market instead of just the median home price.

In October, the median price for a single-family resale home in San Diego County was $610,000. Mortgage interest rates at the end of October were 4.97 percent, said Mortgage News Daily, meaning the monthly payment for a 30-year, fixed-rate mortgage (assuming 20 percent down) was around $2,610. But, interest rates were up 1 percent from the same time in 2017, increasing the monthly cost by roughly $289 in a year.

Zillow senior economist Aaron Terrazas wrote that the market slowdown could benefit buyers and sellers. He said sellers who had been waiting to capitalize on home price gains may finally sell and take advantage of price appreciation, while buyers could have more options.

“Buyers may find themselves with time to catch their breath and save for a home appropriate for them,” Terrazas wrote, “rather than feeling like they’re trying to hit a rapidly moving target in the face of faster appreciation.”

Las Vegas had the highest annual price gains in the nation at 12.8 percent. It was followed by San Francisco at 7.9 percent and Phoenix at 7.7 percent. The lowest price gains were New York City at 3.1 percent and Washington, D.C., at 2.9 percent.

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S&P CoreLogic Case-Shiller Indices for October 2018

Yearly increases by city

Las Vegas — 12.8 percent

San Francisco — 7.9 percent

Phoenix — 7.7 percent

Seattle — 7.3 percent

Denver — 6.9 percent

Tampa — 6.4 percent

Atlanta — 6 percent

Detroit — 6 percent

Minneapolis — 5.9 percent

Los Angeles — 5.5 percent

Boston — 5.4 percent

Charlotte — 5 percent

Portland — 4.9 percent

Cleveland — 4.8 percent

Miami — 4.8 percent

Dallas — 3.9 percent

San Diego — 3.8 percent

Chicago — 3.3 percent

New York — 3.1 percent

Washington, D.C. — 2.9 percent

National — 5.5 percent