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San Diego Home Values Mirror National Price Increase

Aired 7/31/13 on KPBS News.

Home prices go up around the nation and in San Diego, just not as fast as before.

— The newest Standard & Poor's Case-Schiller Home Price numbers are out, and May was another strong month for home values as the string of double digit price hikes continued.

U.S. home prices swelled by more than 12 percent in the 20-city index.

That indicates the housing market's recovery is building in San Diego and the rest of the nation.

But the pace of price gains is tapering off slightly. Earlier this year, home prices climbed more than 20 percent over prices a year ago.

San Diego State University finance professor Michael Lea suspects rising interest rates are tempering the rush upward, but they are not stopping it.

He said the housing market is occupying an unusual place.

"There are unusually low interest rates, an accommodative monetary policy. It is also being affected by the fact that we have the low sales and inventory reflecting that a lot of people are still underwater with regard to their mortgages," Lea said.

As those conditions change, Lea said, the price hikes will likely moderate. Lea said he expects the housing market to continue to rebound.

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