Inland Empire, L.A. Outpace O.C.’s Housing Recovery
Orange County, which led the region’s housing recovery and saw home values move up faster last year than anywhere in the nation, has been overtaken by Los Angeles and the Inland Empire, according to a survey released Wednesday.
The results indicate that as home prices move beyond the reach of growing numbers of Orange County families, more home buyers are turning to such areas as the Inland Empire, pushing up values there.
“The recovery has spread out,” said Nima Nattagh, the analyst who compiled the study for First American Real Estate Solutions, an Anaheim-based real estate research firm. “It’s testament to the fact that Southern California and Los Angeles have turned the corner.”
In Orange County, home values in the second quarter moved up 8.5% over prices a year ago, much slower than the 18% gain recorded last year, tops in the nation. With its latest gain, the county ranked eighth in price growth.
Los Angeles County topped the nation with a 14.6% surge, nearly three times higher than the national average, the survey found. It was the second consecutive quarter that Los Angeles has led the nation in rising home values.
Prices moved up 10.8% in the Inland Empire--Riverside and San Bernardino counties--which ranked fifth in the nation, the survey found. San Diego County ranked ninth, as home values moved up 8.2%.
The robust economy is helping fuel the price surge, creating six new jobs for each new home being planned, according to another recent survey. Apartment rents also have reached record highs throughout the region.
Other California metropolitan areas also ranked high.
In San Francisco, home values moved up 11.6%, the third fastest growth rate in the nation. Oakland ranked seventh at 9.4%, and Sacramento ranked 10th, up 8.1%.
Throughout the nation, home values gained an average 5.3% in the quarter.
Although many homes throughout the Southland have regained the values that they lost during the slump earlier in the decade, Nattagh noted, home values in Los Angeles remain 10% below what they were in 1990. In the Inland Empire, values are still 15.5% below 1990 levels.
In San Diego, homes have gained 11% and in Orange County, 6%, this decade. By contrast home values in leading areas, like Portland, Ore. have streaked by 131%. In Denver, values have shot up 119% in the decade.
The survey analyzes prices of homes that sold at least twice since 1990. Overall, 7 million homes nationwide were analyzed in the survey, including 728,000 in Southern California.
In Los Angeles County, much of the appreciation gain has been registered in Santa Monica, Beverly Hills and other prosperous Westside communities, according to the survey.
With interest rates edging higher, Nattagh said prices will begin to moderate in affluent areas that draw fewer buyers, and show greater growth inland where more people can find lower prices.
“My expectation is that the recovery will now spread to other communities that perhaps did not experience the recovery we’ve had for the last couple of years,” Nattagh said. “At the same time, some of the more affluent areas that have seen rapid rates of appreciation will see more moderate increases.”
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Climbing Home Values
In a nationwide survey, Los Angeles area home values showed the biggest gains for the second quarter in a row this year. Several California metropolitan areas made the list.
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% change % change from a 2nd Quater Metropolitan Area a year ago 1990-99 Los Angeles-Long Beach 14.6% -10.0% Boston 12.2 26.8 San Francisco 11.6 31.4 Denver 11.2 118.6 Riverside-San Bernardino 10.8 -15.5 Minneapolis-St. Paul 9.9 49.0 Oakland 9.4 17.6 Orange County 8.5 6.0 San Diego 8.2 11.1 Sacramento 8.1 -5.3 U.S. Average 5.3 22.6
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Source: First American Real Estate Solutions
