California’s Home Values Expected to Rise, but Slowly

California home values will brush bottom this quarter and move slowly upward next year if price trends hold, according to figures released Friday by a leading real estate data service and a national accounting firm.

But there is huge price variation by region, according to the index developed by DataQuick Information Systems and KPMG Peat Marwick. Sacramento and some other inland areas are tumbling even as the San Francisco Bay area and established Los Angeles suburbs recover lost values.

In the Sacramento suburb of North Highlands and in Adelanto in San Bernardino County, for example, values declined by nearly 18%. Prices fell sharply in South-Central Los Angeles, as they did in parts of San Bernardino, Perris and San Jacinto in Riverside County and Fallbrook in San Diego County.

By contrast, the pricey Half Moon Bay area south of San Francisco rose nearly 10%, and there were big gains in other pricey areas such as Redwood City in the north and Calabasas in the south. Established Los Angeles suburbs such as Glendale, Burbank, Pasadena and Manhattan Beach showed solid increases as well.

DataQuick and Peat Marwick developed the index for Wall Street and bank executives involved in the secondary mortgage market, where home loans are packaged and sold as securities. Prices, age, location and amenities were considered, DataQuick analyst John Karevoll said.

Karevoll predicted that prices overall would bottom out this quarter and begin a slow rise next year so long as trends evident in ZIP Code studies continue.

During the second quarter of this year, home values rose in 195 California ZIP Codes, declined in 332 and were flat in the rest. During the third quarter, values rose in 296 ZIP Codes, declined in 308 and were flat in the rest, according to Peat Marwick and DataQuick.

Overall, the index showed that home values declined 2.6% from third-quarter 1994 to third-quarter 1995. From this year’s second to third quarter, though, values dropped just 0.2%.

The year-over-year decline was as high as 6.3% two years ago, whereas the quarter-to-quarter decline hit 2% at the end of 1992.

Any recovery to the prices of the late 1980s is not in sight. Home values statewide are currently 17% below their second-quarter 1990 peak.

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Winners and Losers

Year-to-year changes in home prices in selected California ZIP codes:

WINNERS

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Zip City Change 94019-20 Half Moon Bay-La Honda +9.9% 91302 Calabasas +9.5 94061 Redwood City +7.9 94306 Palo Alto +7.6 94401 San Mateo +6.9 91207 Glendale +6.7 94043 Mountain View +6.1 90291 Venice +6.0 90266 Manhattan Beach +5.9 94925 Corte Madera +5.8 94024 Los Altos +5.7 91501 Burbank +5.4 91105 Pasadena +5.3 91741 Glendora +5.2 94596 Walnut Creek +5.1 95014 Cupertino +5.0 94941 Mill Valley +4.9 95129 San Jose +4.9 95472 Sebastopol +4.9 95051 Santa Clara +4.0

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LOSERS

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Zip City Change 95660 North Highlands -17.9% 92301 Adelanto -17.7 92345 Hesperia -16.0 95864 Sacramento -15.8 92308 Apple Valley -15.4 92407 San Bernardino -14.4 92571 Perris -12.4 92629 Dana Point -11.2 95820 Sacramento -11.1 93535 Lancaster -11.0 95818 Sacramento -10.9 93560 Rosamond -10.9 90016 South-Central Los Angeles -10.8 92583 San Jacinto -10.8 90807 Long Beach -10.6 92028 Fallbrook -10.6 90003 South-Central -10.0 91316 Encino -10.0 92680 Tustin -10.0 93552 Palmdale -10.0

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Sources: DataQuick Information Systems, KPMG Peat Marwick