SAN DIEGO — San Diego's home prices are rising again, coming in second place for the fastest rate of increase in the country. San Diego ranked second place, shortly behind Detroit, Michigan.
CBS 8 spoke with Frank Powell, the president of the San Diego Association of Realtors. He says he's not surprised San Diego is topping lists for rising home prices.
Why are home prices going up?
Powell blames inflation.
"Inflation is going up, energy is going up, everything is going up, and I can tell you what - the amount you're getting paid ain't going up, so we're in a jam."
He also said it's as simple as supply and demand.
"You have this problem where home affordability is just supply and demand. You want to get the highest level of return on your investment so you're going to sell it for the highest."
Where are home prices rising the fastest?
Detroit and San Diego took the top two spots on the S&P Case Shiller home price index. Two California cities cracked the top ten.
- Third: New York.
- Fourth: Chicago.
- Fifth: Boston.
- Los Angeles was the second California city to make the list, coming in sixth place.
Should I sell now or wait until 2024?
CBS 8 spoke with Craig Lazzara with S&P Dow Jones Indices. He said it's a seller's market.
"If you're a homeowner in San Diego, your property is worth more than it was a year ago. If you're trying to buy, you're probably competing in a market where prices are relatively strong."
In a report released Tuesday, San Diego's annual home price increased 6.5% in September. It's San Diego's highest showing in 2 years.
"It’s evidence of what I would consider a sellers’ market but not to the same degree as the COVID period," Lazzara said. "Housing prices are recovering. They had a modest decline towards the end of last year, and that decline is over."
Will 2023 be a good year to buy a house?
Powell, with San Diego Association of Realtors, says houses in San Diego will be expensive for awhile.
"Unless there were a major economic dislocation, you would expect the trend of strong prices to continue for some time longer."
He also says San Diego needs more houses to sell, whether pre-owned or newly built but that's easier said than done. Construction costs, permit fees and other expenses add up quickly.
"It's cool because it's a great place to live if you already have a house," he said. "Suppose you don't already have a house here. If you don't already have a house here, it's kind of impossible to get one."
Core Logic says San Diego only had 2,101 home sales in September, marking the lowest levels since 1988. The lack of home sales pushed prices up and experts we talked to today say they don't see those prices dropping anytime soon.