Home prices in San Diego rose at their fastest pace in the pandemic in July – up 27.8% in one year.

It was the second-largest price increase in the country, according to the S&P CoreLogic Case-Shiller indices reported on Tuesday, and the largest increase for the San Diego metro area since December 2004. Phoenix remained at the top of the the list of 20 cities with a score of 32.4 percent increase in one year.

The indices are lagging a bit, so it’s possible that July was the peak. The San Diego subway (which includes the entire county) saw its price increases slow for two straight months in August.

Case-Shiller indices are different from just looking at the median home price. It takes into account repeat sales of identical single-family homes – and are seasonally adjusted – as they renew over the years.

Regardless of what the future holds, the July index broke a record for the 20 Cities Index, rising 19.7% nationally. This was its highest annual growth rate since the index began in 1987.

“The past few months have been extraordinary not only for the level of price gains, but also for the consistency of gains across the country,” wrote Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow. Jones Indices.

Several economists studying the index are forecasting a cooling in prices in the coming months, with the number of homes on the market rising nationwide for four consecutive months.

“While still strong price growth continues to present difficult conditions for many potential buyers,” Zillow economist Matthew Speakman wrote, “slowing market conditions appear to be offering some respite for some home buyers.”

Speakman wrote that demand and record low mortgage rates still create a vibrant real estate market, but sales and inventory data indicate there are cooler days to come.

The interest rate for a 30-year fixed-rate mortgage was 2.87% in July, reports Freddie Mac, down from 3.02% the year before. The rate is up from the December average of 2.68%, which was the lowest since 1971.

Home inventory has been on the rise in San Diego County from low points during the pandemic when there were about 3,500 homes for sale each month, the Redfin Data Center said. From July 5 to August 5, there were 4,640 homes for sale, near its highest point of the year. The inventory is still down compared to 2020, when there were 5,875 active registrations in the same period and 8,643 in 2019.

Selma Hepp, deputy chief economist at CoreLogic, said strong buyer demand appeared to outweigh improving home inventories which, in theory, should weaken competition.

“While indicators for the end of the summer suggest some buyer fatigue,” she wrote, “house price growth is expected to remain in double digits until the end of 2021”.

Even the slowest price increases on the indexes saw double-digit gains. Chicago grew 13.3% in one year and Minneapolis 14.5%.

San Diego experienced the strongest price growth of any California market with a gain of 27.8%. San Francisco grew 22% in one year and Los Angeles 19.1%.