RISMEDIA, July 5, 2007—According to Runzheimer International, a Wisconsin-based consulting firm, analysis of housing market values in selected California cities suggests that the Golden State housing market bubble is slowly deflating.
Runzheimer examined the average price for a 2,700 square foot home from January 2003 to June 2007 in San Francisco, Los Angeles, San Diego, and Sacramento. Each of the four markets peaked in late 2005/early 2006 and then began a gradual decline. By January 2006, the Los Angeles market had appreciated an astounding 72.1%, topping the charts for the selected cities (See Table 1). Although the San Diego market reached its high-point first, in the fourth quarter of 2005, it has since decreased 11.25%, the largest drop of the four areas. Housing values assume a 2,700 sq. foot house in selected living communities where an $85,000 annual income, family of three would typically live.
Since their peak, home values in the four sampled cities seem to have taken a step back in time; Los Angeles and Sacramento values are back to the levels they were 3rd Quarter 2005, while San Francisco prices mirror their 1st Quarter 2006 levels.
In San Diego, it’s as if the last two years never happened. While the gradual housing market correction is likely to lead to a soft landing, potential gains in the near future in these real estate markets appear to have either severely diminished or no longer exist.
For more information, visit www.runzheimer.com.
