10 Apr Real estate in San Diego bucks housing bubble predictions
Just a few short years after U.S. median home prices reported double-digit increases for the first time since 2007, credit agency Fitch Ratings suggests homes along coastal and resort areas in California and other cities may be overvalued by nearly 20 percent or more. The forecasts, released in a report late last year, come at a time when median U.S. home prices overall have increased 11 percent and San Diego real estate prices and home values are on the rise.
Housing bubble fears unfounded?
So far, San Diego real estate home values have remained strong in 2014.
San Diego real estate prices rose 18% from December 2012 to December 2013, ending the year among the nation’s top five in appreciation, according to the S&P/Case-Shiller Home Price Index. The real estate figures are impressive gains and positive developments for real estate in Carmel Valley, Del Mar, La Jolla, Rancho Santa Fe, Santaluz and Solana Beach.
Overall, San Diego was among the top cities for real estate prices as measured by the S&P Indices. San Diego homes for sale slowed in the second half of 2013 but still packed a powerful real estate punch to end the year with the best appreciation since 2004. That year, values rose 26.6 percent. In 2013, San Diego real estate prices peaked in August at 21.5 percent.
Homes for sale in San Diego remain strong
In California’s premium coastal real estate market, where some of the state’s most expensive real estate exists, Fitch analysts warned that the area’s healthy price increases are not sustainable long-term. That’s primarily because the real estate market is still flush with cash-only deals, and because of the return of house flipping, where investors buy homes, renovate and sell them quickly for a profit.
In February, the median home price of homes for sale in San Diego was $410,000, up from $405,000 in January and 14.2 percent higher than the median price of $359,000 one year ago, according to research from real estate tracking firm DataQuick.
And if recent sales in San Diego are any indication, fears of a housing bubble in San Diego are wildly unfounded. Coastal homes for sale in La Jolla aren’t experiencing a downturn at all; real estate prices are increasing. The median price of single-family homes for sale in La Jolla in February 2014 was $1.75 million – a 5.1 percent increase from January.