BY JENNIFER DAVIES UNION-TRIBUNE STAFF WRITER
ORIGINALLY PUBLISHED JULY 27, 2010 AT 6:49 A.M., UPDATED JULY 27, 2010 AT 2:58 P.M.
San Diego home prices increased 12.4 percent in May from a year ago and San Diego was the only metro area in the country with 13 months of consecutive increases in home prices, says the latest Standard & Poor’s Case-Shiller Home Price Index released Tuesday.
San Diego’s increase was the second highest of the 20 metro areas surveyed, with San Francisco taking the top spot with an 18.3 percent increase.
On a monthly basis, San Diego saw its home prices increase 1.1 percent. Since spring is one of the busiest times for home selling, Case-Shiller also provides seasonally adjusted numbers, which showed San Diego with a slightly lower increase at 0.6 percent.
On a nationwide level, prices in the 20 metro areas Case-Shiller tracks were up 4.6 percent from May 2009.
Despite the increases, there are plenty of reasons to be pessimistic about the housing market for the rest of the year.
While prices nationally have improved from the lows hit in April 2009 — San Diego hit its Case-Shiller low in May 2009 — they’ve essentially been flat for much of the past seven months. According to Case-Shiller’s index, home prices in San Diego are at about the same level they were in June 2003.
Maureen Maitland, vice president of Index Services at Standard & Poor’s, said the end of tax credits and the busiest home-buying season means there is little else to prop up home prices.
“Sure, April and May look good. But you have to look at the trends,” she said. “Going forward, all bets are off. You need true economic recovery for the housing market to be sustained.”
Kelly Cunningham, an economist with National University System Institute for Policy Research, said he doesn’t foresee the San Diego region going through another gut-wrenching drop in housing prices but he also doesn’t see any eye-popping gains, either.
“It’s going to be kind of stagnant is the best way to put it,” he said.
Still, stagnant might not be all that bad when compared to other parts of the country. San Diego and other California cities have been performing better than their counterparts in the Sunbelt because they didn’t go through frenzied building sprees during the bubble.
“In coastal California, we have constrained housing development,” Cunningham said. “It comes back down to supply and demand. We don’t have the problems that Las Vegas, Phoenix or even Riverside have.”
Jennifer Davies: (619) 293-1373; jennifer.davies@uniontrib.com
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