After declining four out of the last five months, the Case-Shiller Index for San Diego rose in January by 0.71%. The year-over-year change was 5.1%, which is pretty hefty considering how high prices already were at the beginning of 2014.
Dave rains on the parade, as usual:
“Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback,” said David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices.
Yes interest rates matter but in SoCal the beach (and near the beach) properties skew the price average higher by quite a bit.
Also I think it is more of an international market that rates do not have as much effect as most other markets would have that do not attract as many wealthy out of state buyers.
Not sure they include that in their forecast etc…
IMO once you get 8-10 or so miles east of the I5, things start to look more like a normal market would.