Home Prices jump 5.5% according to today’s S&P/Case Shiller Home Price Index report.
The S&P 20-city composite rose 5.5 percent year over year in September, compared with consensus estimates for a 5.2 percent rise.
In San Francisco the September home prices increased at the fastest pace, up 11.2 percent on the year, this was followed by Denver and Portland, Oregon, which turned in gains of more than 10 percent! All 20 cities surveyed reported higher prices than a year earlier.
San Diego Home Prices:
The good news for San Diego home owners was that the change in Case-Shiller San Diego, CA Home Price Index is at 6.62%, compared to 5.97% last month and 4.99% last year. This is higher than the long term average of 5.48%
Home sales have increased 3.9 percent in the past 12 months. At the same time, the number of homes for sale, has fallen 4.5 percent.
So, let’s see . . . Home prices rising, wages flat……, seems about right in the “new normal”, must be the uber low interest rates and the fear of the Fed raising rates that’s motivating people to take the plunge.
The big question will be whether these people can actually afford the homes if the economy tanks again? Won’t matter if your mortgage is 3% on a 30 year note when you’re buying real estate at premium prices (over paying) with little to no down payment.
We could be seeing another set up if there is a down turn in economy and in turn the real estate market. Hopefully on a somewhat smaller scale as compared 2008/2009 but would still be bad to have it happen twice in the course of 10 years.
