San Diego Real Estate Prices Rose in May According to the Case/Schiller Report Released Tuesday
Jul 30th, 2010 by Kathleen Behrens
Houses for Sale in San Diego – The San Diego real estate market posted its 13th consecutive monthly increase for home values in San Diego and ranked second highest for improvement in home prices among 20 major U.S. cities according to the July 27th press release of Standard & Poor’s/Case-Schiller Home Price Indices. The latest Case Schiller report includes data for home values through May 2010 for 20 major metropolitan cities, including the San Diego real estate market.
The results for home values in both the 10 and 20 City Composites reflect increases of 5.4 percent and 4.6 percent, respectively, from home price levels in May 2009. However, David M. Blitzer, Chairman of Standard & Poor’s Index Committee, cautioned despite the positive appearance of the May results for U.S. home values over the previous year, this does not necessarily indicate a sustained recovery of the national housing market.
Although 15 of the 20 individual cities tracked showed improvements in home values from the previous May, and 19 of the 20 cities showed gains in home prices from April to May of this year, the increases can be attributed to several temporary factors. In addition to spring being a typically strong seasonal period for home values, the May data was also affected by the economic benefit of government stimulus programs such as the federal homebuyer tax credit.
Homebuyers had until April 30, 2010 to enter into a contract on a home to receive the credit. The original deadline for closing escrow was June 30, 2010. However, it has been extended through September 30, 2010. Although the federal homebuyer tax credit will influence home price results through the extended escrow deadline, the effects are likely to begin diminishing as the deadline approaches. Blitzer believes it is possible the U.S. housing market will continue to bounce along the bottom before we begin to see real improvement.
The three California real estate markets, San Diego, San Francisco, and Los Angeles all posted increases in home values from March to April, April to May, and May 2009 to May 2010. The California real estate markets represented three of the top four cities with the highest gains in home prices over the year period and two of the only three cities with home value percent increases in the double digits.
The Los Angeles real estate market ranked fourth with a 9.7 percent annual increase in home prices. The San Francisco real estate market topped the charts again with an 18.3 percent improvement in home prices. With home value gains of 12.4 percent, the San Diego real estate market placed second. In addition to the annual gain of nearly 12 and ½ percent, the home prices for San Diego real estate improved 0.7 percent from March to April and 1.1 percent from April to May, marking the 13th consecutive monthly increase for home values in the San Diego real estate market.
However, the California real estate markets have undoubtedly benefited not just from the federal homebuyer tax credit, but from the California homebuyer tax credit programs as well. The $10,000 California homebuyer tax credit program began accepting applications from two different groups of homebuyers on May 1, 2010 on a first come-first served basis. Homebuyers may qualify for the first time homebuyer credit or the new home credit. Each category began with $100 million in funds.
As of July 29th, the California Franchise Tax Board (CFTB) has received over 30,000 applications from first time homebuyers who are hoping to claim the credit. Although it is likely enough applications have been received, the CFTB is still accepting more to ensure they have enough to distribute the entire $100 million. However, just because they accept an application does not mean the credit is guaranteed. The credit will be distributed in the order applications were received until the funds have been depleted. Buyers who purchase new homes in California still have time to submit a reservation request or an application. As of July 27th, the CFTB has received 10,810 requests and applications for the new home credit worth an estimated $70,384,000.
With record low interest rates and low, yet continually improving San Diego real estate values, now is an excellent time to purchase San Diego real estate. Begin your search of houses for sale in San Diego today, or contact San Diego Broker and Realtor Russ Petrone of Petrone Properties Real Estate Associates at 858-259-1000 to have a customized search of the houses for sale in San Diego designed specifically for you based upon the criteria you require for your San Diego home. With 25 years of experience in the San Diego real estate market, Russ has the community knowledge, negotiating skills, and expertise to help you find and purchase the perfect San Diego home for you.