Sacramento-area home values will rise by nearly 12 percent this year, after a similar increase in 2012, online real estate tracker Zillow predicted today.
The forecasted rate of increase, driven by short supply and buyer demand, far outstrips Zillow's predicted national price hike of 3.3 percent over the next year.
The nearly 6 percent national rise in home values recorded last year compared with 2011 exceeded typical appreciation in healthy markets of about 3 percent. National gains this year will be more in line with historic levels, Zillow predicted.
"It's important to be cautious moving forward, even as we celebrate the undeniably positive end to 2012, and be careful that consumers don't grow to expect such high appreciation as the norm," said Zillow Chief Economist Stan Humphries.
"Buying a home should be a long-term decision, and these swings between a deep housing recession and higher-than-normal appreciation rates can give consumers whiplash and cause some to lose sight of that."
Nevertheless, Zillow predicts that prices will continue rising by double digits in Sacramento, where home prices in many neighborhoods fell by half during the housing crash and bottomed out in the first quarter of 2012.
Elk Grove will see a nearly 14 percent increase from December 2012 to December 2013, Zillow said. Roseville will have a 13 percent rise in home values over the same period. And Sacramento home values will rise by 11 percent through December.
The Sacramento region's rising values are helped by increases in Lake Tahoe-area prices in El Dorado and Placer counties, which are included in the region's metropolitan statistical area.
With Bay Area and other buyers scooping up second homes at lower prices, the cities around the lake will be among the top performers in 2013, Zillow said.
Carnelian Bay and Tahoe City will see home values rise by about 17 percent this year, while Tahoma will see a 15.4 percent price spike, Zillow said.
The Sacramento region's predicted gains in 2013 mirror those of nearly 12 percent in 2012, when investors snapped up foreclosures and first-time buyers and move-up buyers competed to take advantage of rock-bottom prices and historically low interest rates of about 3.5 percent for 30-year mortgages.
Meanwhile, foreclosures continued falling. Bank-owned houses made up 17 percent of all home sales in December 2012 in the Sacramento region, compared with about 19 percent in December 2011.
Nationally, foreclosure resales made up 12.4 percent of all sales, Zillow said.