San Diego unseated as No. 1 metro with fastest-growing home prices

San Diego home prices rose the fastest in the nation for six months. Now, a new metro has taken the top spot.

The San Diego metropolitan area’s annual home price increased 9.1 percent annually in May, according to the S&P Case-Shiller Indices report released Tuesday. New York took the top spot, with prices up 9.4 percent in a year, dropping San Diego to second in the 20-city index.

New York’s metro area is the largest in the nation. It includes New York City, parts of New York state, much of New Jersey and Connecticut, and Long Island. For comparison: San Diego’s metro area, which includes all of San Diego County, has 3.2 million people, about 16.3 million less than the New York metro area.

All metros in the index were up in May and the overall index hit a record high for the third month in a row.

Lisa Sturtevant, chief economist at Bright MLS, wrote that home prices tend to go down in the second half of the year and increased homes for sale in many markets might slow price growth.

“With affordability a growing challenge for homebuyers and more new listings coming onto the market,” she wrote, “we could be at the peak.”

The pace of home growth is slowing in most markets and in San Diego. From January to March, San Diego home prices were up around 11 percent annually, and 10.3 percent in April. May marked the first time this year the annual rise was not in the double digits.

San Diego still had the second place finish and was followed by Las Vegas, up 8.6 percent in a year, and Los Angeles, up 8.4 percent.

The Case-Shiller Indices track repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The median resale single-family home price in the San Diego metro was $1 million in May.

Prices were rising in May despite some of the highest interest rates of the year. On the last day of May, the average interest rate for a 30-year, fixed-rate mortgage was 7.17 percent, said Mortgage News Daily. It was down to 6.81 percent by Tuesday morning.

Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said consistent home price gains over the past six months stood out in the history of the index.

“The last time we saw that long a streak was when all markets rose for three years consecutively during the COVID housing boom,” he said. “This rally pales in comparison in both duration and annual gains.”

San Diego home prices were up 29.6 percent in March 2022, making the latest report’s gains seem small.

Many economists predict a slowing of home price gains because of a rise in the number of homes for sale. Low inventory typically means a rise in prices because of buyer competition.

San Diego County has not seen the same rate of inventory gains that much of the nation has experienced. In May, there were around 4,500 homes for sale here, said the Redfin Data Center. That’s up from a low point of roughly 3,000 to start the year, but still down from historical averages.

New York metro is in the top spot but is less expensive than most California markets. Redfin said the median sale price for a single-family home in New York metro was $800,000 in May, compared to $1 million in San Diego.

Portland continued to have the slowest gains in the nation, where it has been on the index for much of the past year, up 1 percent annually. It was followed by Denver, at 2.1 percent, and Minneapolis, at 2.4 percent.

Annual price growth by metropolitan area, S&P/Case-Shiller Home Price Index, May 2024

New York: 9.4 percentSan Diego: 9.1 percentLas Vegas: 8.6 percentLos Angeles: 8.4 percentMiami: 7.6 percentChicago: 7.5 percentCleveland: 7.5 percentBoston: 7.2 percentCharlotte: 7.2 percentSeattle: 7.1 percentDetroit: 6.9 percentWashington, D.C.: 6.1 percentAtlanta: 5.7 percentPhoenix: 4.4 percentSan Francisco: 4.3 percentTampa: 3.3 percentDallas: 2.6 percentMinneapolis: 2.4 percentDenver: 2.1 percentPortland: 1.0 percent