California home prices are on the rise, according to the S&P Case-Shiller Indices.
The San Diego metropolitan area’s annual home price increased 8 percent in November. It was the second highest in the 20-city index for a third month, behind Detroit, which rose 8.2 percent.
Los Angeles-Orange County prices rose 7.2 percent and San Francisco was up 2 percent.
Nationwide prices increased 5.4 percent — its highest level in 2023.
“The main reason prices continue to rise is because inventory is so low,” wrote Lisa Sturtevant, chief economist for Bright MLS, “and there is little to suggest that the supply picture is going to change dramatically in 2024.”
She wrote that it’s possible some high-cost markets could soften in the new year because rising prices with higher interest rates are potentially unsustainable. But, she said buyers in higher cost markets, like San Diego, should not expect drastic price cuts.
The Case-Shiller Indices track repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years.
Zillow senior economist Orphe Divounguy said it’s important to remember that prices were starting to drop around this same time last year. He noted monthly data shows San Diego prices rose just 0.2 percent from October to November.
In the last week of November, the average interest rate for a 30-year, fixed-rate mortgage was 7.2 percent, said Freddie Mac. It was down to an average 6.87 percent Tuesday morning, said Mortgage News Daily.
