Tuesday, Oct. 27, 2009 | Housing prices in San Diego County rose again in August, rounding out a summer of monthly price gains, according to data released Tuesday.
Prices rose a seasonally adjusted 1.52 percent between July and August, the Standard & Poor’s/Case-Shiller home price index showed.
Though prices in August were still down 8.85 percent from the same month in 2008, that year-over-year gap has been shrinking, reaching single digits for the first time in nearly two years. Those gaps were larger than 20 percent for more than a year of the downturn.
“It seems to me that it is the process of turning around,” said Lynn Reaser, president-elect of the National Association for Business Economics and chief economist at Point Loma Nazarene University. “The lower end in particular seems to have turned a corner.”
But these slight increases for a few months come in the shadow of an extraordinary downturn that left the economy reeling. As of August, local housing prices had fallen 38.75 percent from the market peak in November 2005, reaching a level last seen in November 2002.
Even though the bleeding has subsided, the future for San Diego’s market and surrounding economy remains murky. The sense that prices have stopped falling fuels a frenzy in the market. Adding to the momentum: a looming deadline for a federal tax break incentive for first-time homebuyers and attractive interest rates, luring more buyers into the ring and increasing demand.