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San Diego Home Prices Flat But Still Expensive

A "For Sale" sign in front of a home in San Carlos in this undated photo.
KPBS Staff
A "For Sale" sign in front of a home in San Carlos in this undated photo.

A real estate expert says the San Diego market has been flat for at least a year. But it's still expensive and there are no signs of home prices dropping.

Some home price indexes still show strong growth in the cost of San Diego homes. But Norm Miller, a real estate finance expert at University of San Diego, said those numbers typically don't account for house size. And if you look at price per square foot, prices have only risen about 1% over the past year.

Miller finds that kind of strange.

"We saw some pretty significant mortgage rate declines and our market should be going crazy," Miller said. "But there's two problems. No. 1, people don't want to move. There's not much inventory. They're stubborn on that end. We're not building a whole lot."

Many factors can influence the home market. And maybe some troubling sentiments underlie San Diego's strong economy.

"I see this economic uncertainty, trade war, tariffs and other things moving us sideways," Miller said. "We should be going up but we're moving sideways."

In fact, Miller said home prices among the bigger, more expensive homes have actually dropped. He thinks this is due to new federal tax laws that limit the deduction of property taxes. That boosts the after-tax cost of owning a big home and, consequently, drives down the home price.

But when it comes to the overall housing market, the lack of supply in San Diego means homes will still be expensive.

"We tend to veto every single legislative effort to increase density and housing supply. So given what I see at the dog park in the morning in terms of the California culture toward new development — I don't see it," Miller said.

Miller said he gets home price statistics from Collateral Analytics. He said the cost of an average single-family home in San Diego is about $800,000.

San Diego Home Prices Flat But Still Expensive
Listen to this story by Tom Fudge.