San Diego home prices up 7.8 percent from August of last year - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

San Diego home prices up 7.8 percent from August of last year

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SAN DIEGO (CNS) - San Diego home prices rose 0.9 percent between July and August, and increased 7.8 percent from August of last year, according to the latest Standard & Poor's CoreLogic Case-Shiller Indices that were released Tuesday.

The annual increase was the third-largest among the 20 major real estate markets tracked by S&P.

The indices were created by taking the price of homes in those cities in January 2000, assigning them a value of 100, and tracking their subsequent rise and fall.

In August, San Diego's mark was at 245.55, representing a home value increase of nearly two and a half times over nearly 18 years. Prices have risen at a greater rate only in Los Angeles.

The 20-city index stood at 202.87 in August, up 0.4 percent for the month and 5.9 percent on an annual basis.

David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, pointed out that the jump in housing prices has outstripped inflation and costs of other goods and commodities, with only oil coming close.

"The ongoing rise in home prices poses questions of why prices are climbing and whether they will continue to outpace most of the economy," Blitzer said. "Currently, low mortgage rates combined with an improving economy are supporting home prices."

He said the price gains aren't just a rebound from the financial crisis because they're reaching all-time highs nationally and in many individual markets.

However, affordability -- long a problem in San Diego and the rest of California -- is beginning to slip nationally, shrinking the pool of prospective buyers, according to Blitzer. He also said that mortgage rates will eventually follow moves by the Federal Reserve to boost interest rates.

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