Home values have dropped in three-quarters of Southern California, providing a mixed bag of opportunities and challenges for potential buyers. A recent report from Zillow indicates that about 79% of homes in the Los Angeles and Orange County area have experienced a decline in value over the past year. This trend reflects broader shifts in the housing market across the region, as figures reveal significant depreciation in home prices since their peaks.
Regional Insights on Home Value Declines
In the Los Angeles and Orange County area, the average decline from previous high valuations stands at 7.5%, placing it as the 14th-highest among 50 metropolitan areas evaluated by Zillow. Despite this drop, homes in the region remain valued at an average of 85% above their last purchase price, which ranks as the sixth-highest nationally. Compounding the issue for potential buyers, current homeowners in the area are hesitant to sell, with a median ownership duration of 12 years, the second-longest in the country.
In San Diego County, 78% of homes have seen a decrease in value, with an average decline of 8.2% from peak valuations. This places the county as the 17th region for value drops. Homeowners in San Diego also display a tendency to hold onto their properties, with a median ownership period of 11 years and an impressive 88% gain above the original purchase price.
Meanwhile, the Inland Empire reports that 74% of homes have lost value, averaging a 6.5% decline from their peak valuations. Homeowners here tend to keep their properties for a median of 10 years, resulting in an 80% gain over purchase prices, indicating a robust appreciation despite current declines.
Comparative Analysis with Northern California
The decline in home values is even more pronounced in Northern California. In Sacramento, a staggering 88% of homes have lost value, with an average decline of 8.7%. In San Francisco, 83% of homes saw value reductions, averaging a dramatic 14.8% drop from their peaks. San Jose follows closely, where 78% of homes have lost value, averaging a 10.3% decline.
Nationally, home values have also dipped, with 53% of homes across the United States experiencing a decline, averaging a 9.7% drop from their peak values. The median ownership period for homes nationally is 9 years with a 67% gain compared to purchase prices.
As potential buyers navigate the current market landscape, the interplay between declining home values and the reluctance of homeowners to sell presents a complex scenario. The insights from Zillow’s report, as analyzed by business columnist Jonathan Lansner of the Southern California News Group, emphasize the ongoing challenges and opportunities within the real estate market in Southern California.
