San Diego loves a real estate bubble

Despite a soft market statewide, San Diego home values and sales volume continued to creep up as 2014 drew to a close, new numbers released this week indicate.

Analysts fear, however, that high prices are being maintained in large part due to abnormally low interest rates and a loosening of credit standards by lenders, two factors that led to the last market bubble that burst in the mid-2000s.

"As we predicted early in 2014, sales volume stayed near seven-year lows throughout 2014 because prices rose too far too fast in 2012 and 2013," said Madeline Schnapp, economic research director for market tracking firm PropertyRadar, in a release. "While prices are likely still too high, 2015 may fair [sic] slightly better thanks to mortgage interest rates trending lower and loosening lending standards."

Although sales throughout California were off 13 percent last month as compared to December 2013, the number of completed transactions in San Diego was up almost 7 percent. The median local home price also rose modestly, from $491,690 a year ago to $494,500 last month.

The California Association of Realtors puts a rosier spin on prices appearing to reach a peak, going so far as to suggest it's a good indication for prospective purchasers.

"Home prices have stabilized over the past year, which is positive news for buyers who have been putting off their home search until prices leveled off," said association vice president and chief economist Leslie Appleton-Young in a separate release touting the new sales figures.

A family would need a minimum income north of $100,000 to afford a median-priced home in the county, according to the most recent association survey, conducted in November. This assumes the buyer has access to a 20 percent down payment and sterling credit in order to take advantage of the best loan terms available.