According to CoreLogic’s recent HomeEquity Report, California homeowners experienced a gain in wealth of
approximately $40,000, highlighting the higher home prices.
This is all good news for current
homeowners, it also indicates good things to come for the nation’s economy.
Gains in wealth tends to stimulate extra consumer purchases.
In the U.S., equity grew the most in
Californian where they saw the biggest rise in home equity, with the average
homeowner gaining $44,000 over the year. Washington homeowners experienced
gains of $40,000, on average, while those in Utah, Nevada, Massachusetts and
Idaho saw jumps of $20,000 or more. Equity increased the smallest in Louisiana,
where homeowners gained just $311 for the year.
The midpoint price of all sales for a Southern California home was $507,000 last month, which is only $2,500 below the all-time high it hit in December 2017, the Irvine-based real estate data firm reported in late February.
That's a rise of 11.4 percent from
the January 2017 median price, the highest appreciation rate dating back to May
2014. By comparison, the average price increase over the past two years was 6.7
percent.
The biggest gains occurred in the
Inland Empire, which has Southern California's most affordable home prices.
Median prices rose 12.1 percent to $370,000 in Riverside County and 10.8
percent to $312,500 in San Bernardino County. Ventura County’s median increased
9.8 percent to $560,000, while Orange County saw prices leap 8.8 percent to
$690,000 vs. average price gains of 6 percent. Los Angeles County’s
year-over-year gain of 7.6 percent was closer to its two-year average of 7.2
percent. The January median there was $565,000.
Inland Empire home sales represented
nearly a third of all Southern California transactions last month, which is
also the most. It's also the Inland Empire’s largest share of sales in six
years.
Inland Empire economist John Husing says
"People are being priced out of the coastal counties, and the (price)
differential is the largest in history between the coastal counties and the
inland counties. So, more people are looking to migrate inland."
But similar to other parts in
Southern California, there's not enough housing to meet demand in Riverside and
San Bernardino counties, Husing said.
The large price gains are due to not enough housing which means these
homes would sell for and appreciate less with a normal supply and demand
inventory.
There has been a rise in blue collar
jobs in the Inland Empire, yet white collar people in such fields as tech and
finance now make up the largest share of commuters driving to and from Orange
and L.A. counties for work.
