County home values continue soaring

Up 10.2% on yearly basis, beating U.S.

San Diego County home values shot up 2.2% in March from February, topping the increase of 1.2% among the 20 largest metro areas, according to Standard & Poor's/Case Shiller data released this morning (May 28). Over the last 12 months, San Diego home values rose a stout 12.1%, topping the 10.2% of the 20 largest metro areas. Fired greatly by low interest rates, housing values are going up sharply throughout the nation.

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Why are they increasing? Are the banks holding back foreclosed properties from the market to artificially drive up prices? Are there enough people out there that can HONESTLY afford to buy a home right now? Salaries aren't increasing at the same rate housing costs are, and many people are having their hours cut to part-time status. Should we be investing in helium for the short term to blow the next set of balloons up? I just don't see how this is possible right now.

Aardvark. The Fed has lowered interest rates to record low levels. This includes mortgage rates, since our central bank is frenetically buying long term paper. That is one factor. Also, as you point out, foreclosures are being artificially held down. Best, Don Bauder

soaring because greedy real estate agents are perpetuating the housing shortage story ?

Murphyjunk: That may be part of the story. Also speculators are buying -- many with cash. Interesting that the markets moving up the fastest are the ones that already have the highest prices -- San Jose, San Francisco, Los Angeles, and San Diego. Of course, some formerly deeply depressed markets such as Vegas and Phoenix are moving rapidly, but they have a lot of ground to make up. Best, Don Bauder

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