Home values jump 16.6 percent in Sonoma County
Published: Wednesday, February 6, 2013 at 8:17 a.m.
Last Modified: Wednesday, February 6, 2013 at 8:17 a.m.
Is your home worth more today than it was a year ago?
A new report that analyzes repeat home sales suggested the answer is yes.
Home values in Sonoma County jumped 16.6 percent in Sonoma County over the past year, the sharpest increase in more than seven years, according to figures issued Tuesday by CoreLogic, a property information service.
When distressed sales were excluded, county home prices increased 11.4 percent in December, compared to a year ago, according to CoreLogic.
The company’s report differs from others that simply track median home prices. CoreLogic’s Home Price Index evaluates repeat sales of houses and condominiums, factoring in the time between transactions, the types of homes and whether the deals involve a foreclosure, short sale or home with equity.
Experts said the news fits with what they’re seeing, including other reports on home prices.
“All the data is telling the same story,” said Rick Laws, vice president of Pacific Union International in Santa Rosa.
Laws, who compiles The Press Democrat’s monthly housing report, has calculated the median price for a single-family home in Sonoma County rose to $389,750 in December, an increase of 23.7 percent from a year earlier. Part of that increase represents appreciation, while some is merely due to a jump in sales in the more expensive move-up and million-dollar home segments.
CoreLogic reported Tuesday that U.S. home prices rose 8.3 percent in December, compared to a year ago. It was the biggest gain since May 2006, near the height of the housing boom.
Excluding distressed sales, prices increased 7.5 percent nationwide. December marked the 10th consecutive month of year-over-year price increases.
“We are heading into 2013 with home prices on the rebound,” said Anand Nallathambi, president and CEO of CoreLogic. “The upward trend in home prices in 2012 was broad-based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery.”
Statewide, home values rose rose 12.6 percent in December, compared to a year ago, or 12.8 percent when distressed sales were excluded. Only Arizona, Nevada and Idaho registered bigger gains.
The December price increase was the largest registered in Sonoma County since October 2005. It amounted to the ninth straight month where county home prices increased on a year-over-year basis.
Sonoma State University economics professor Robert Eyler said a large increase isn’t surprising after home prices tanked and the economy started to rebound.
“When you fall flat on your face, movements up can be relatively rapid in terms of percentage,” Eyler said.
The rise in value could mean fewer homeowners remain underwater, Eyler said. The term refers to those who owe more on their mortgages than their homes are worth.
An estimated 26.5 percent of county homeowners with mortgages, or nearly 28,000 properties, were underwater last summer, according to the most recent data from CoreLogic. In contrast, in late 2009 the number was about 34,000 homeowners, or 32 percent of those with mortgages.
Curt Thor, a Novato appraiser and president of the North Bay chapter of the Real Estate Appraisers Association, low interest rates have fueled an increase in prices in Sonoma County.
“A a lot of it has to do with the interest rates. They’re so low,” he said.
CoreLogic said its repeat-sales index is based on more than 65 million transactions and other “observations” nationally over the last 30 years. The index doesn’t compute a dollar figure for the value of a typical home. And CoreLogic’s report doesn’t offer perspective on how far home prices fell during the housing market crash or how much prices have rebounded since.
County homes sales peaked in 2005, when the median price hit $595,000, according to The Press Democrat’s report. Prices then plummeted and the median price declined to an annual low of $325,000 in 2011.
Eyler said he isn’t worried that home prices now are rising too quickly. But lasting increases will depend on the ability of local companies to boost hiring and compensation.
“If your local economy doesn’t have rising incomes or rising job growth or both, it’s very difficult to sustain a housing market,” Eyler said. “It’s just that simple.”
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