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<p>Zillow.com predicted today (July 23) that national home values will rise 5 percent between the second quarter of this year and the second quarter of next year. But San Diego County home values will zoom 9.3%, although that will lag Los Angeles (11%), San Francisco (10.6), Riverside (16.6), and Sacramento (18.9). San Diego will top San Jose (8.1%), but median prices in San Jose (essentially Silicon Valley) are $714,900 now, while in San Diego they are $417,600. San Diego values rose 4.6% in the second quarter, almost doubling the nation's 2.4%, and 21.2% compared with a year ago, one of only 7 metro areas topping 20%.

Zillow predicts that the rate of price appreciation nationally at some point will slow as speculators cool off and more inventory comes on line.

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Comments

jnojr July 23, 2013 @ 1:07 p.m.

I've been hearing radio ads by Armando Montolongo stating that, "Flipping is back". Between that and crazy appreciation figures... I'm going to go ahead and say the bubble's back. The precipitous drop in residential real estate values from '06 onward was not some artificial decline that is just now being "made up for"... it was a correction. It simply is not sustainable for house prices to be 8X, 9X, 10X the average annual income.

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Don Bauder July 23, 2013 @ 3:05 p.m.

jnojr: Zillow goes out of its way today to say this is not a bubble, although it warns it isn't going to last. Remember, San Diego values are still down 25-30% from their late 2005/2006 peak. However, with the Federal Reserve and other central banks running the printing press like crazy, all kinds of asset values are swollen. Best, Don Bauder

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Burwell July 23, 2013 @ 8:12 p.m.

Buyers are routinely financing $800,000 houses with only $20,000 down in San Diego and have been for some time. FHA loans are easy to obtain and only require a 3.5% down payment. It's no wonder housing pricing are going up. The great unwashed have been unleashed on the housing market for a second time. The rules are being weakened to accommodate the slugs who can't save money.

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Don Bauder July 23, 2013 @ 10:35 p.m.

Burwell: Our leaders, particularly at the Federal Reserve, believe that asset inflation is better than the product and service inflation measured by the CPI. But haven't they learned anything? Bubbles aren't good. Best, Don Bauder

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Don Bauder July 24, 2013 @ 1:08 p.m.

Murphyjunk: Yes, San Diego County home values are still far off their highs, and plenty of homes are underwater. Best, Don Bauder

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ImJustABill July 24, 2013 @ 1:46 p.m.

I wonder if Zillow accounts for higher mortgage interest rates in their prediction.

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Don Bauder July 24, 2013 @ 9:18 p.m.

ImJustABill: Yes, the probability of higher mortgage rates is one of the factors in the Zillow prediction that this boom will slow down. Best, Don Bauder

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zollner July 24, 2013 @ 4:48 p.m.

I live in Rancho San Diego. This is what I've seen in the last year. A house goes up for sale and a week later the SOLD sign is put up. About a week after that all kinds of fixing up activity take place, which goes on for about a month. Soon after a FOR RENT sign goes up. The house sits empty for several months. On the FOR RENT sign they list how much per month, anywhere from $2,300 to $2,800. If you figure in the 1st and last months rent plus security deposit, that is a good chunk of change. I see these housing prices as artificial, the banks are controlling the inventory, as all these houses up for sale in my neighborhood are foreclosures.

So the banks control the supply and the speculators are increasing the demand, and the average middle class family is shut out. Once the speculators start to lose money the demand goes down and so do the prices. These current prices are not sustainable.

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Don Bauder July 24, 2013 @ 9:20 p.m.

zollner: There is no question that speculators are bidding up this market, and they will vamoose when prices get too high. Best, Don Bauder

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