Los Angeles County and San Francisco led the nation in home-price appreciation last year, according to a survey being released today.
Both areas saw home values jump by 13.7% over 1998, more than twice the average increase of 6.5% among 35 of the nation’s biggest home markets, according to First American Real Estate Solutions, an Anaheim real estate research firm.
But Los Angeles County still has not made up the ground lost early in the decade. Last year home values in L.A. County remained 8% below peak levels of the last decade.
By comparison, home values in the San Francisco area, which included Marin and San Mateo counties, were up 36.7% last year from 1990. Nationwide home values have increased by 24% from the start of the decade, according to the report.
The study calculated values using the repeat-sales model, which measures price changes of homes that sold at least twice since 1990. Many consider this as a more accurate index than standard median or average sales price measures.
Despite the strong increase last year, First American analyst Nima Nattagh said Monday that he expects the economy to slow and interest rates to edge higher this year, producing a slower rate of home-price appreciation in Los Angeles County--in the range of 5% to 6%. That would still leave much of the county somewhat short of the peak values in 1990.
Still, Nattagh said, many of the region’s homeowners will see values rising at a faster pace than the nation as a whole.
“For the rest of the year, you will continue to see parts of Southern California outperforming the national average,” Nattagh said.
Home values in Orange County rose by 8.6% last year, and were 9% above 1990 levels. Houses in the Riverside-San Bernardino area saw gains of 9.2% last year, but were off 15.9% from 1990.
Nattagh predicted that Los Angeles County and the Inland Empire would outperform Orange County in the rate of home value increases this year, partly because of stronger gains in lower-priced homes.
Less expensive homes in Lancaster, Palmdale and parts of the San Fernando Valley have accounted for most of the recent housing gains in Los Angeles County, as more people looked inland to find more affordable homes. That has helped boost prices in those areas. He expects that trend will continue.
Other California areas that ranked in the top 15 in rising home values last year were San Jose, with an 11.9% increase; Oakland, 11.5% rise; San Diego, up 10.1%.
First American’s report was based on 7 million repeat sales, including 316,000 in Los Angeles County.