A recent housing industry
report from Zillow revealed that home prices in the L.A. metropolitan area
appreciated by around 244% from 1998 to 2018. That was among the biggest gains
of all major metro areas in the U.S., during that 20-year period of time.
Orange County Home Values Have Increased Over 260% in
20 Years
We hear a lot about home-price changes from year to year. But what about the long term? Sometimes, it’s interesting to see how much home values rise during a 10- or even 20-year period.
We hear a lot about home-price changes from year to year. But what about the long term? Sometimes, it’s interesting to see how much home values rise during a 10- or even 20-year period.
Among other things, this
allows us to calculate average appreciation rates without them being overly
influenced by short-term spikes or dips. We can also compare one city to
another, to determine where prices have risen the most over time.
Zillow recently analyzed
data from the L.A. almanac to highlight how home prices have changed in
Southern California and more than 30 other major metropolitan areas throughout
the U.S., spanning a course of 20-years. To be precise, they calculated the
difference between the median home value in each metropolitan area.
According to this
research, a home purchased in Orange County for $262,900 back in 1998 would be
valued around $769,900 in today’s housing market (source: http://www.laalmanac.com/economy/ec37.php). That means the homeowner
would have gained $507,000 over the 20-year period of 1998 to 2018.
Based on real data that
bodes well for future homeowners. House values in the Orange County area
actually have risen at that pace.
Incomes Rose at a Slower Pace
The median household income in the Orange County metro area rose by 76.2% during the 20-year period mentioned above. This means that home values in the area have risen almost twice as much as incomes.
The median household income in the Orange County metro area rose by 76.2% during the 20-year period mentioned above. This means that home values in the area have risen almost twice as much as incomes.
Orange County is not
distinct in that way. Zillow’s statistics throughout the country as a whole
reveal a matching trend, with home-price gains surpassing household and
individual income growth. Across the country, the median home value improved by
98.6% throughout the 20 year period from 1998 to 2018. In contrast, the median
household income in the U.S. increased by 52.6% during that timeframe.
In Orange County, the
spread between income and home-appreciation is more noticeable than in a lot of
other U.S. cities. This is partially attributable to the double-digit yearly
gains in home values that took place during the first few years following the
housing crash.
Cities with the Greatest Prices Increases
Out of all the 35 metropolitan areas within the study, San Jose, CA, had the biggest improvement in home prices. From 1998 to 2018, the median home value in that city rose by a massive 296%. Prices in other California metro areas like Los Angeles-Long Beach-Anaheim increased by 244%.
Out of all the 35 metropolitan areas within the study, San Jose, CA, had the biggest improvement in home prices. From 1998 to 2018, the median home value in that city rose by a massive 296%. Prices in other California metro areas like Los Angeles-Long Beach-Anaheim increased by 244%.
The one thing that each
of these housing markets share — including Orange County — is that home price
appreciation has slowed in the number of transactions. This is partly due to
the rise in mortgage rates.
