By Philip Molnar, The San Diego Union-Tribune
San Diego was among the top three cities in the U.S. with the biggest annual home price increases in September, said a key real estate index released Tuesday.
The region’s home prices have risen 8.2 percent in a year, said the S&P Case-Shiller Indices. Only Seattle and Las Vegas had bigger increases in the 20-city index.
San Diego also made its way into the top three cities in the previous month. Before that, the last time it received that distinction was 2014.
The backyard of house in Oceanside in mid-November. (Hayne Palmour IV / San Diego Union-Tribune)
Susan Wachter, a real estate economics professor at the Wharton School at the University of Pennsylvania, said San Diego’s price increases show steady job growth but, like much of the nation, a lack of homes for sale.
“Every job doesn’t come along with a new house. That’s the bottom line,” she said. “Supply doesn’t necessarily respond to demand, and it hasn’t.”
San Diego County added 24 new homes for every 100 jobs created from 2012 to 2016, according to building permits and the U.S. Census. As of September, the region was adding about 30 homes per 100 jobs.
San Diego’s yearly increase outpaced the nationwide gain of 6.2 percent and the other California cities covered by the index, Los Angeles (6.2 percent) and San Francisco (7 percent).
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. Prices are adjusted for seasonal swings.
David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, wrote in the Tuesday report that low mortgage rates and home inventory shortages will likely continue to push prices up for the foreseeable future.
“Most economic indicators suggest that home prices can see further gains,” he wrote in the report.
Zillow chief economist Svenja Gudell wrote in an email that rising prices might be good for homeowners but other residents can suffer.
“Demand is coming first and foremost from buyers in the entry-level and mid-market segments, but available inventory is largely concentrated at the high end,” she said, “causing the nation’s most affordable homes to grow in value at more than twice the pace of homes at the top of the market.”
Seattle had the biggest yearly increase at 12.9 percent, followed by Las Vegas at 9 percent.
The lowest increases were in Washington, D.C., at 3.1 percent and Chicago at 3.9 percent.
National home prices rose slightly more than analysts expected. Economists polled by Reuters predicted a 6.1 percent nationwide increase, as opposed to the 6.2 percent increase reported Tuesday.
In September, the median home price in San Diego County was $535,000, CoreLogic reported last month.
S&P CoreLogic Case-Shiller Indices for September 2017
Yearly increases by city
Seattle - 12.9 percent
Las Vegas - 9 percent
San Diego - 8.2 percent
Portland - 7.3 percent
Boston - 7.2 percent
Denver - 7.2 percent
Tampa - 7.2 percent
Dallas - 7.1 percent
San Francisco - 7 percent
Detroit — 6.9 percent
Charlotte — 6.2 percent
Los Angeles — 6.2 percent
Phoenix — 6.1 percent
Atlanta — 5.4 percent
Cleveland — 5.4 percent
Minneapolis — 5.4 percent
New York — 5.2 percent
Miami — 5 percent
Chicago — 3.9 percent
Washington D.C. — 3.1 percent