DQNews Archived Article

Home Values in California

by Real Estate Analyst John Karevoll
January, 2000

La Jolla, CA.— How many homes haven't passed prior?
How many homes are passing prior by month?

California's average homeowner is now 'making' $2,376 a month just by owning their home. During last year's fourth quarter, the value of California's housing stock increased at its fastest pace since the late 1980s, a real estate information service reported.

The value of the state's 7.1 million houses and condos edged up to a record $1.808 trillion during the last three months of 1999. That was up 11.2 percent from $1.626 trillion at the end of 1998, according to DataQuick.

Last quarter's 11.2 percent rate of increase was up from 10.0 percent the year before. The current growth rate is well below the peak of 26.5 percent for 1989's second quarter.

"Everyone knew that the frenzy of the late 1980s couldn't last, and it didn't. Today's growth rates can stay in place for quite a while longer, certainly through this spring and summer," said Mike Ela, who heads up DataQuick.

"While most homeowners are content to watch the value of their investment increase, many are accessing their equity by establishing lines of credit, or 'cash out' refinancing," he said.

The value of California's housing stock is increasing by close to $20 billion each month, pouring equity into homeowner finances and contributing to economic growth, a real estate information service reported.

The value of California's seven million homes was $1.77 trillion in August, up 9.9 percent from $1.61 trillion a year ago, according to DataQuick.

The rate of appreciation is remarkably stable, a year ago values were going up at a 10.2 percent annual rate. During the frenzied late 1980s, values were going up more than 20 percent, while they dropped at an annualized rate of around six percent during 1992 to 1994. Although some California homes still have not regained their pre-recession value, most have, and the current valuation of the state's housing stock is the highest on record.

The annualized increase in value is currently strongest in the Bay Area at 12.0 percent. Southern California is experiencing a 9.1 percent increase and in the Central Valley, the increase is 7.2 percent and rising.

"The average California homeowner is making almost $3,000 a month just owning their home. With interest rates where they are now, it's tempting for many to tap into that equity," said Mike Ela, president of DataQuick.

Lenders are actively marketing equity lines and refinance mortgages. More than forty-five thousand equity lines totaling $2.4 billion were established in August, and 79,965 homeowners replaced old mortgages with new ones totaling $8.5 billion.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The valuation numbers above are arrived at by running an electronic appraisal of every home in the state, and then adding the market values up. Included are all properties that county tax assessor offices have designated as houses or condos. Ranch and other multi-use properties are not included. Newly-built homes are not included if they haven't been sold yet.

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 2000 DataQuick Information Systems.
All rights reserved.

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