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Summer homebuying season fizzled

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The pace of home price appreciation continued to slow in San Diego County in July, a time of year usually thought of as summer peak buying season.

The S&P/Case-Shiller Home Price Index showed Tuesday that from July 2013 to July 2014, home prices in San Diego rose 8.3 percent, down from the 10.2 percent annual gain in June. The pace has been slowing since August 2013, when foreclosure resales pushed annual appreciation to 21.5 percent.

“It was kind of an outlier in terms of typical summer activity,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “We had very low inventory and yet prices were still very soft.”

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The index, which lags two months, compares repeat sales of single-family homes. The slowdown in the pace of appreciation wasn’t limited to San Diego - it happened in 19 of the 20 cities tracked, with only Cleveland showing no change. Overall, the 20-city composite value rose 6.7 percent over the year, down from 8.1 percent in June. It was the slowest annual nationwide gain since November 2012.

David Blitzer, chair of the Index Committee at S&P Dow Jones, noted that home prices are still rising two to three times the rate of inflation.

“The broad-based deceleration in home prices continued in the most recent data,” Blitzer said in a statement. “The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales. The rise in August new home sales - which are not covered by the S&P/Case-Shiller indices - is a welcome exception to recent trends.”

San Diego’s annual gain ranked it fifth behind Las Vegas, Miami, San Francisco and Detroit.

Jordan Levine, director of economic research at Beacon Economics, said he sees values leveling off at about 5 percent annual gains. He said inventory is still low, but demand will increase amid other recent economic growth, including employment. What’s unlikely, Levine said, is another large run up in prices led by investors fixing and flipping foreclosure resales.

“Double digit gains can’t be sustained indefinitely in the absence of double digit growth in incomes,” Levine said. “The mix of homes being sold obviously played into those kind of inflated growth rates that we’ve been seeing in the last couple of years. We went from a period of many, many foreclosures to a time of less foreclosures.”

While prices in San Diego County rose 0.3 percent from June to July on the index, adjusted for seasonal factors they fell 0.1 percent. CoreLogic DataQuick, another real-estate tracker, reported the median home sold in July for $445,000, a 6.6 percent annual gain.

Goldman said while the summer wasn’t a typical peak homebuying season, he’s recently noticed improvements in the market.

“All those buyers that we would have expected to see this summer seem to be coming back into the market,” he said. “We’re seeing more inventory, more activity. It was slow this summer.”

The Associated Press contributed to this report.