California Housing Market Travels Back In Time
June 27, 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 (See Table 2).
Table 1: Housing Value Increases in Selected Markets Since 2003 |
Market |
1st Quarter 2003 |
Peak Quarter |
Peak Value |
% Increase |
San Francisco |
$ 942,600 |
4th Quarter 2006 |
$1,327,300 |
40.8% |
Los Angeles |
$ 546,300 |
1st Quarter 2006 |
$ 940,000 |
72.1% |
San Diego |
$ 516,900 |
4th Quarter 2005 |
$ 869,600 |
68.2% |
Sacramento |
$ 410,900 |
2nd Quarter 2006 |
$ 700,200 |
70.4% |
Table 2: Housing Value Decreases in Selected Markets Since 2003 |
Market |
Peak Value |
Peak Quarter |
2nd Quarter 2007 |
% Decrease |
San Francisco |
$1,327,300 |
4th Quarter 2006 |
$1,286,500 |
3.1% |
Los Angeles |
$940,000 |
1st Quarter 2006 |
$904,000 |
3.83% |
San Diego |
$869,600 |
4th Quarter 2005 |
$771,700 |
11.25% |
Sacramento |
$700,200 |
2nd Quarter 2006 |
$633,700 |
9.5% |
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.
About Runzheimer International
Founded in 1933, Runzheimer International serves 60 percent of the Fortune 500. Runzheimer provides a full suite of employee mobility-related services in the areas of business travel, business vehicle reimbursement programs, corporate aircraft, relocation, international assignment and virtual office programs.
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For more information, Contact Jennifer Ruppel at Runzheimer International, Runzheimer Park, Rochester, Wisconsin 53167. Telephone: 262.971.2271, email jmr@runzheimer.com, www.runzheimer.com.
