Home Prices Up in 7 Southland Counties

Underscoring the breadth of Southern California’s real estate recovery, a closely watched survey has found that home prices are rising in every county from San Diego to Santa Barbara for the first time in 7 1/2 years.

The year-to-year gains ranged from more than 12% on the Westside to about 1% in many Inland Empire areas in October, according to the study to be released today by the Real Estate Research Council of Southern California.

It is the first time since April 1990 that prices in all seven counties in Southern California have increased simultaneously, said Michael Carney, the Cal Poly Pomona professor who supervises the research.

“The recovery is now firmly in place nearly everywhere in Southern California,” Carney said.

He said prices should continue to go up in the wake of falling unemployment and rising consumer confidence. Even areas with lagging prices, such as the Antelope Valley, should begin to show gains in six months to a year, he added.

Many appraisers, lenders and local governments subscribe to his twice-yearly survey, which checks the value of the same homes again and again.

Steve Cauley, an economist with the UCLA Business Forecasting Project, said the findings mirror those of the UCLA studies. With the economy strong, interest rates low and pent-up demand from years of bad markets unsatisfied, upward pressure on prices will generally continue, he said.

“As long as we don’t hit an economic downturn, which we aren’t forecasting, I don’t think prices are going to go down anywhere in Southern California,” Cauley said.

Carney’s latest report shows that Riverside County, the last holdout, has joined the ranks of Southern California counties reporting a rebound in housing prices.

Prices of Los Angeles County homes in the survey rose an average of 3.2% in October over prices a year earlier. Other counties with solid gains were Orange, up 3.1%; and Santa Barbara, up 3.3%.

Prices increased 2.6% in San Diego County, 1.4% in Ventura County and 1% or less in Riverside and San Bernardino counties.

Overall, prices in the region rose 2.5% to an average of $218,181, from $209,748 a year earlier.

While the local housing market is picking up momentum, the gains are modest compared with the San Francisco Bay Area, which is beginning to resemble the frenzied market in the late 1980s. Prices in the Bay Area have gone up about 10% overall in the last year, and by about 16% in Silicon Valley, Carney noted.

Carney said he expects Southern California prices to rise more slowly, near the rate of inflation. While San Francisco-area prices are at or above historical highs, Southern California prices are still 18% below their 1990 peak of $268,177, and foreclosures are still at high levels, he said.

For Carney’s survey, appraisers calculate the value of the same homes again and again throughout the region. Some Los Angeles County homes have been tracked as far back as 1944, Carney said.

Affluent areas, which have led the recovery, continued to show the strongest gains. Besides the 12.2% increase in the Westside -Santa Monica area, San Fernando Valley prices rose 6.3%, southwestern Los Angeles County (excluding Long Beach), was up 7.9%, central Orange County rose 5.8%, and San Diego beach areas were up 4.7%.

Prices continued to fall in Palmdale-Lancaster (-5.3%), southeast Los Angeles County (-3.9%) and the San Bernardino, Palm Springs and eastern San Diego County areas (about -2% each).

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Home Growth

Home prices in Southern California rose in October compared with a year ago.

Los Angeles County: +3.2%

Orange County: +3.1%

Riverside County: +1.0%

San Bernardino County: +0.2%

Ventura County: +1.4%

San Diego County: +2.6%

Santa Barbara County: +3.3%

Source: Real Estate Research Council of Southern California