With double-digit price appreciation returning to some Bay Area markets, we're used to hearing that the region's homeowners are a lucky bunch, richer by the minute.
It's often true, but not always.
A new report by Trulia, the real estate website, finds that only 60.4 percent of single-family homes in the Oakland metropolitan area have recovered their pre-recession peak values, compared with 84.3 percent in metropolitan San Jose and 98 percent in the San Francisco metro area. Out of 100 U.S. metros whose housing recovery was measured by Trulia, Oakland ranks 34th, while San Jose ranks 19th and San Francisco is No. 2 in the nation.
"It's important to realize that even though home prices have boomed in the Bay Area and a lot of people have gained a lot of equity in their homes, it's not necessarily a ubiquitous phenomenon," said Ralph McLaughlin, Trulia's chief economist and author of the report. "In some areas, the recovery is still yet to be complete for all homes."
Even so, Bay Area homeowners are in much better shape than their counterparts nationally. The report, titled "The Housing Recovery that Wasn't," finds that just over a third — 34 percent — of the nation's homes have seen their values surpass their pre-recession peaks. The peak value for each home, as defined by the study, could have been reached at any time between Jan. 1, 1996 and Dec. 1, 2007.
The report notes that markets with strong post-recession income growth tend to have large percentages of homes passing their pre-recession peaks. In Denver — the No. 1 market for "recovery," according to Trulia — more than 98 percent of homes passed their pre-recession peaks, while income growth stands at 20 percent. In San Francisco, job growth has been even higher — 25.5 percent — though the recovery rate of 98 percent is a tad lower. San Jose's income growth is 21 percent, while Oakland's is 17 percent.
The Oakland metropolitan area includes Contra Costa County, where many homes in outlying areas have yet to surpass their post-recession values. McLaughlin said that likely explains why Oakland — which has a reputation as a real estate hot spot — landed 34th on the list nationally. Only 37 percent of Contra Costa County's single-family homes have regained their pre-recession peaks, according to Trulia, as compared with nearly 81 percent in Alameda County, 87 percent in Santa Clara County and 98 percent in San Mateo County (which is part of the San Francisco metro area, as defined by the study).
Likewise, the No. 19 ranking for the San Jose metro — synonymous with Silicon Valley and its hot real estate — owes something to its geographic breadth. The metro area includes San Benito County, as well as large swaths of residential Santa Clara County that "are far away from the epicenter of the tech boom," McLaughlin said.
"Places like Gilroy and Morgan Hill and South San Jose are pretty far removed from where the economic engine is running on all eight cylinders," he said. "Housing prices in those areas are not being buoyed up as much as in other areas."
Prices on homes in Sunnyvale and Mountain View are "being blown out of the water by young high-tech buyers," said Intero agent Craig Gorman, past president of the Santa Clara County Association of Realtors. "From the time you bought the home to the time it closes, you've already made money by the time it closes. Some areas of Morgan Hill and some areas of the Eastside San Jose haven't done as well."
In April, the CoreLogic real estate information service issued a report showing that home prices have surged in much of the Bay Area as buyers fight for the small number of houses on the market. The median price of a single-family home rose 11.5 percent year over year to $1,050,000 in Santa Clara County, for instance, and by 13.5 percent to $772,000 in Alameda County — record highs for both counties.
By focusing on the values of individual houses, the Trulia report offers a different perspective of the market.
It "paints a very different picture" from what typically emerges from "aggregate measures of house prices — medians and averages," McLaughlin said. Those broad-based measurements tend to "mask the variation of home value recovery of individual homes."
Certainly "those that bought near the bottom of the market in 2011 and 2012 are probably doing pretty darn good," he conceded. "But for those who bought 10, 11 or 12 years ago, their homes may still be worth less than they were back then. The recovery is not complete."
