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Home prices continue to level off | Cross River Real Estate

The pace of home price appreciation in San Diego County fell to a level near its historical average in September, as the housing market continued its return to normalcy after last year’s investor-led run-up in prices.

In September, the median price for a home sold in the county was $445,000, up 5.5 percent from a year earlier, DataQuick reported Monday. Since the real-estate tracker began collecting the data in 1988, San Diego County has averaged an annual home-price gain of 5.2 percent.

“It’s difficult to talk about normal in a boom-bust state, but this is in line with the long-term average and certainly more sustainable,” said DataQuick analyst Andrew LePage.

In August, when annual appreciation was 8.1 percent, the median home price was $448,500.

The slowdown to 5.5 percent in September marked first time the annual pace of home-price appreciation has been near its historical average since July 2012. At that time, however, home values were recovering from the Great Recession, and annual appreciation was on its way to more than 24 percent year-over-year gains, which it reached in June 2013.

Those big home price gains came largely due to investors fixing and flipping distressed properties. Most of that activity is now in the past, with foreclosure resales making up 3.3 percent of the transactions in September. Now, market prices are being driven by traditional factors, such as incomes, supply and mortgage rates.

“Wages aren’t going up, gas, energy, insurance, everything else is going up faster than wages,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “It’s going to squeeze the housing dollar.”

The number of transactions was nearly flat over the month, declining by 19 sales to 3,305. Activity in the county’s housing market is down 2.3 percent from September 2013, when 3,383 properties changed hands.

Jordan Levine, director of economic research at Beacon Economics, said that his organization is forecasting 4 percent to 6 percent annual appreciation. He noted that DataQuick reports a median price for all homes sold, meaning that even in the days of d