The Chronicle analyzed home value data from real estate listings company Zillow to see what ZIP codes across California had the fastest average growth in typical home values from May 2021 to May 2022. The analysis took only ZIP codes with populations of 1,000 or more into account, based on U.S. census data.
One pandemic hallmark trend that continues in California is people moving out of more expensive population centers to less-expensive, more suburban or remote areas, said Matt Kreamer, a data spokesperson for Zillow.
Data from January 2020 to January 2022 previously analyzed by The Chronicle reflected that trend, with communities in Southern California’s High Desert overwhelmingly represented in the top 10 ZIP codes with the fastest average growth in typical home values.
Now, other Southern California communities dominate the list, though two Northern and Central Coast vacation spots were at the very top.
As populations have grown in some areas, it’s been driving up home prices and making them less affordable, Kreamer noted.
“As more people look toward and move to those places seeking affordability, it creates more competition and prices start to grow more quickly,” he wrote in an email. “The pandemic and rise in remote work really put that trend into overdrive.”
Southern California ZIP codes dominate
Kreamer said this trend is playing out in a big way in Southern California, where Los Angeles residents looked to San Diego and the Inland Empire, particularly first-time home buyers who can find better opportunities in those locations.
According to our analysis of Zillow data, six San Diego ZIP codes made the state’s top 20 with highest home value growth from May 2021 to May 2022, including three in Carlsbad, about 30 miles north of San Diego.
“Interestingly, San Diego home values have grown much more quickly than Los Angeles home values during the pandemic, and the typical home in both places is now nearly the same,” Kreamer said.
Zillow’s Home Value Index measures a region’s typical home value and housing market appreciation, currently and over time, based on multiple data sources, including seasonal variations and the values of homes nearby. The approach differs from that used by many Realtors, whose data comes from regional Realtor and broker databases called multiple listing services; the methodologies can differ and the analyses would not be directly comparable.
Carlsbad Realtor Tina King said that in the past couple of years, many people have moved there from Los Angeles and the Bay Area, including executives, professionals and younger families who can work remotely.
“It’s not as crowded here,” King said. “It still feels a bit more sleepy, the weather is great, but it’s expensive just like anywhere else.”
The draws include the ocean views, great beaches and weather, and the “lifestyle community” that includes plenty of outdoor activities and sports, King said, adding that schools in the area are also very good.
The demographics for the three Carlsbad ZIP codes are somewhat similar, with the median age in the early 40s, about 64% to 75% white, and 8% to 20% Hispanic. The median household income is highest in the 92009 ZIP code at $138,000, followed by $115,000 in 92011 and $86,000 in 92008.
King noted that the market has cooled off some since about April.
“Prices are declining and inventory is up in these ZIP codes,” she said, going from two weeks of inventory a year ago to two months currently.
“There are more choices for buyers and sellers are competing against each other,” she said. “There are no longer 10 to 15 bids per home. Homes are sitting now.”
But even as the market is correcting, prices are “slightly ticking up” in some areas, King said. In 92009, the median list price was $1.8 million last month, but now it’s $2.08 million.
“Coastal towns will always do well,” she said.
Vacation areas are still hot
California spots where people normally go to get away have become more desirable during the pandemic, and not just for a second home or investment property. Some people from the Bay Area who can work remotely have picked up and moved to the coast or the forest for a change of pace.
“We’ve also seen areas that have traditionally been thought of as vacation towns heat up over the past couple of years,” Zillow’s Kreamer said. “Places like Tahoe, the Central Coast, etc., have seen significant price growth as people rethink how and where they want to live, given the expanded opportunity many have gotten because of the pandemic.”
He added that land constraints can limit inventory, usually a combination of “a lack of buildable land and regulations that make it a lengthy and expensive process to build,” which also increases prices, particularly when interest grows and more competition arrives.
The town of Groveland is a gateway to Yosemite National Park, about 25 minutes west of the popular tourist destination, and had the state’s third-highest home value growth at 38%, from a typical home value of $321,405 in May 2021 to $443,885 in May 2022.
Barry Scales, a broker and the owner of Pine Mountain Lake Realty, said most Groveland residents are over 60 and retired. The average age is 63, and 88% of residents are white, 5% Hispanic, 2% Asian and 2% Native American, according to the U.S. Census. The median household income is nearly $56,000.
But during the pandemic, that has started to shift, with “more inclusive buyers” and many people coming up from San Francisco and San Jose, Scales said. Within Groveland is Pine Mountain Lake, which includes about 3,000 homes in its gated community featuring a golf course, restaurant, airport, tennis courts and campground.
Groveland is not too far from other tourist attractions including Cherry Lake, Don Pedro Reservoir, Angels Camp, wineries and Dodge Ridge Mountain Resort. The trade-off, though, is “you have to drive 45 minutes to the nearest small city” to do more extensive shopping, Scales said.
No. 1: Sea Ranch
Two picturesque towns along the coast have seen the state’s highest home value growth in the past year. The unique community of Sea Ranch along the Sonoma County coast, with a population of just over 1,100, is known for its timber-frame homes that blend into the landscape.
Following the familiar pandemic pattern, the ability to work remotely has opened up new living possibilities for many people. Patty Battega, a broker associate in the Mendocino Coast area, said the more recent addition of high-speed internet in Sea Ranch “changed everything” for the community, so new residents could work from home.
She said people were mostly coming from elsewhere in California, including many from around the Bay Area, Sacramento and Los Angeles. Some people just walked into Battega’s office and asked about the town, which was a new experience for her and her business partner, Lisa Hantzsche.
Battega said there are about 1,800 homes in Sea Ranch out of 2,225 lots, with quite a bit of building still happening. However, she added that costs have gone up substantially, and building in the area comes with strict rules and property limitations.
In Sea Ranch, the concept is to “live in harmony with nature,” she said.
Before the buying frenzy, only about a third of residents lived in Sea Ranch full-time, Hantzsche said. Now, it’s about half, with the rest vacation rentals and second homes.
“We’re getting more families now in Sea Ranch than we ever have,” she said.
The area has always had a “strong retirement community of active retirees,” Hantzsche said — though, while there is a good medical center, if residents need more hospital care, they often move out.
According to the U.S. Census, the median age in Sea Ranch is 68, and 83% of residents are white, 17% are Hispanic and 1% are Asian. The median household income is just over $78,000.
The Realtors said the proximity to the Bay Area and private airstrip offers good access for those who need to travel. There are a few small schools in the area, but Battega and Hantzsche said it’s likely that many families homeschool their kids.
Sea Ranch is technically in a high fire danger area, which Hantzsche said is more of a concern on the ridge, which is more heavily wooded. But she said few fires have occurred there because of the coastal proximity and high humidity, and the air is usually mostly clear when inland wildfires burn.
One downside is that, even with the new residents moving in, “it’s harder to attract business owners” for members of the younger generation, who may be used to going out to eat in bustling metros, Hantzsche said. “I do think we could use more of a variety of restaurants.”
No. 2: Carmel
The 93921 ZIP code, which includes Carmel-by-the-Sea, was second on the list with a home value increase of 43% from May 2021 to May 2022. Typical home values went up from $2.32 million to $3.33 million.
Like many other areas, sales are slowing down. About six weeks ago, Carmel broker associate Lisa Talley Dean said, available homes were in the single digits, and now that has nearly tripled. The area has “many more discretionary owners,” she said — which means “people don’t need to sell” and prefer to hold on if they can’t buy a replacement property.
Historically, Talley Dean said, 80% to 90% of homeowners in her market share of Carmel and Carmel Point have been in retirement or nearing retirement, who owned second homes in the area. Now, it’s about 50-50, at least from her experience.
“I’m seeing many more people moving here as full-time residents,” she said. “The demographic has shifted to younger, still working people with young families,” either working for themselves or able to work remotely. She said the shift has brought a “vibrancy to the community,” which has long had a “sleepy” reputation. Most buyers have come from within the state, with more than ever moving from Southern California.
However, “There is still a lack of diversity here,” Talley Dean said. “We don’t have a lot of casual ethnic restaurants, which you would find in a larger city. Most restaurants have gotten so expensive. … There is a lack of casual restaurants at a reasonable price.”
The median age in the 93921 ZIP code is 65; 89% of residents are white, 3% Hispanic and 2% Asian. The median household income is just over $93,000.
Kellie Hwang is a San Francisco Chronicle staff writer. Email: firstname.lastname@example.org Twitter: @KellieHwang