Home values in Orange County grew at a slower pace last year, by 8.6% over 1998, from the double-digit increase that led the nation the previous year, according to a survey to be released today.
Economists had expected a slower growth rate after Orange County had posted a sizzling 18% gain in 1998. That spurt allowed homeowners overall to recoup what had been lost during the housing downturn earlier in the decade, according to First American Real Estate Solutions, an Anaheim real estate research firm.
With last year’s price appreciation, Orange County’s home values stood at 9% above 1990 levels.
By comparison, home values in Los Angeles County surged by 13.7% last year, leading the nation among 35 major markets studied by First American. But that still left L.A. County 8% below 1990 levels.
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 gauge than standard median or average sales price measures.
Nima Nattagh, an analyst at First American, said that the smaller increase in Orange County home values last year did not mark a worrisome trend. Rather, he said, the market was returning to a more sustainable pace of activity.
There’s also less pressure on prices now as more homes are being approved for construction. The Construction Industry Research Board reported that 12,242 homes were planned in Orange County last year, a 21% increase from the previous year.
“The moderation in the rate of growth bodes well for the county,” Nattagh said. “It should be looked at as a healthy rate.”
Nationwide, the report says, home values rose by 6.5% in 1999. Eight out of the top 15 fastest-growing markets were in California, with the San Francisco area tying Los Angeles County at 13.7%.
Home values in the San Francisco area were up 36.7% from 1990, and they were up 44% in the San Jose area. For the nation, home values have increased by 23.6% from the start of the last decade. The report showed that values have increased the most in the Portland-Vancouver area in Oregon, by a whopping 123.5% since 1990, a reflection of that area’s slow-growth initiatives.
Nattagh said he expects the economy to slow and interest rates to edge higher, producing a slower rate of appreciation across the Southland--in the range of 5% to 6% this year. Still, he added, many of the region’s homeowners will see values rising at a faster pace than the nation as a whole.
According to the study, other California areas that ranked in the top 15 in price-appreciation last year were San Jose, with an 11.9% increase; Oakland, an 11.5% rise; San Diego, up 10.1%; and the Inland Empire, up 9.2%.
The report is based on 7 million repeat sales, including 316,000 in L.A. County and 132,000 in O.C.