San diego home prices rose 1% in may, but expert doesn't see bubble

San Diego home prices rose 1 percent in May, according to the widely-followed Case-Shiller Index, but a national expert downplayed talk of a bubble. The latest index released Tuesday morning

showed San Diego prices up 6.6 percent over the past year as housing prices nationally continued to surge. “Home prices continue to climb and outpace both inflation and wages,” said David

M. Blitzer, managing director of S&P Dow Jones Indices. “Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when

rising prices were almost universal.” “The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices,” he explained. “New home construction, higher than

during the recession but still low, is another factor in rising prices.” Nationwide prices rose 1 percent in May, and were up 5.6 percent over the past year. A number of Western cities are

seeing much bigger price increases than San Diego. Seattle led the nation with a 13.3 percent increase over the past year, followed by Portland at 8.9 percent and Denver at 7.9 percent.

Zillow Chief Economist Dr. Svenja Gudell echoed Blitzer’s concerns about the slow pace of home building. “At this point in the recovery, the main story in housing is less about rising home

prices and more about the falling, woefully insufficient inventory of homes for sale,” Gudell said.