CNBC still looking through their doom-colored glasses, while ignoring the history of price increases cooling off this time of year (2018’s pricing just started cooling off earlier):
Home prices are still rising, but the pace of the gains continues to slow, as potential homebuyers hit an affordability wall and sellers cave to the new reality.
“Rising homes prices are beginning to catch up with housing,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “Sales of existing single family homes have dropped each month for the last six months and are now at the level of July 2016. Housing starts rose in August due to strong gains in multifamily construction. The index of housing affordability has worsened substantially since the start of the year.”
Las Vegas, Seattle and San Francisco continue to see the biggest annual gains in home prices, with increases of 13.7 percent, 12.1 percent and 10.8 percent respectively. Five of the 20 cities saw home price gains accelerate annually compared with June.
Since home prices last bottomed in 2012, following the epic housing crash, 12 of the 20 cities tracked by S&P Corelogic Case-Shiller have reached new highs, although those are not adjusted for inflation. Those that are still lower were some of the cities that saw the greatest gains during the last housing boom, like Las Vegas, Miami, Phoenix and Tampa. All those cities are still seeing strong price gains now, especially Las Vegas, which leads all the cities in gains.
While demand for housing is still strong, a continued shortage of for-sale listings has overheated prices throughout much of the past year, and buyers stepped back.
San Diego Non-Seasonally-Adjusted CSI changes:
These get revised every month, so it’s likely that this July index will be lower than June the next time you see it on October 30th.
The previous peak was 250.34 in November, 2005. We are 3% above that now.
We can probably expect the SDCSI to cool down in the second half of the year, just like it did the last two years! Let’s note that in 4Q17, the cumulative change for the index was -0.1%.