CoreLogic’s Chief Economist Frank Nothaft gave some insight into this change,
“The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home. The slackening in demand is reflected in the slowing of national appreciation, as illustrated in the CoreLogic Home Price Index.
National appreciation in August was the slowest in nearly two years, and we expect appreciation to slow further in the coming year.”
Rising inventory will slow down growth
One of the major factors that has driven prices to accelerate at a pace of between 6-7% over the past two years was the lack of inventory available for sale in many areas of the country. This made houses a prized commodity which forced many buyers into bidding wars and drove prices even higher.
According to the National Association of Realtors’ (NAR) latest Existing Home Sales Report, we are starting to see more inventory come to market over the last few months. This, paired with patient buyers who are willing to wait to find the right homes, is creating a natural environment for price growth to slow.
Normal Appreciation is 3.7%
Historically, prices appreciated at a rate of 3.7% (from 1987-1999). CoreLogic predicts that prices will continue to rise over the next year at a rate of 4.7%.
San Diego Prices are up 5.8%
San Diego median home sale prices are up 5.8% compared to normal appreciation of 3.7%. The median home sales price in San Diego is $550,000 (through Sept 2018).
Note – Rotate your screen if you cannot see the chart through Sept. 2018.
San Diego Inventory is 2.8 months
San Diego inventory is up to 2.8 months. A balanced market between buyers and sellers is 6 months inventory. As you can see, we are back to inventory levels from Sept 2015.
- September 2018 – 2.8 months
- September 2017 – 2.0 months
- September 2016 – 2.4 months
- September 2015 – 2.8 months