SEATTLE, Oct. 23, 2014 /PRNewswire/ -- Appreciation
in home values is slowing definitively after nearly two years of
accelerating year-over-year growth, according to the third quarter
Zillow® Real Estate Market Reportsi. Homebuyers who have
been priced out of hot markets will welcome the cooling off, and
the most recent data should further combat worry about another
housing bubble.
The rate of annual home-value appreciation peaked at 8.1 percent
in April and has fallen in every month since. U.S. home values were
up 6.5 percent year-over-year at the end of the third quarter, to a
Zillow Home Value Indexii of $176,500.
The rate of appreciation is expected to continue to slow. Home
values are forecasted to grow at 3%, roughly half their current
pace, through the end of the third quarter of 2015, according to
the Zillow Home Value Forecastiii.
As the market cools, the dynamic between buyers and sellers is
also changing. At the end of the third quarter, there were 18.6
percent more homes on the marketiv than last year, and
more homes listed recently had a price cut. In September, nearly 37
percent of listings on Zillow had at least one price cut in the
past month, up from 33.6 percent in September 2013. The softening market means
homebuyers will find less competition.
The pace of home value appreciation dropped off significantly in
markets that had been among the hottest at times during the housing
recovery, particularly in California and the Southwest. In Los Angeles, home-price appreciation slowed
from 18.5 percent annually in the third quarter of 2013 to 8.3
percent over the past year. Annual appreciation in San Francisco slowed to 8.2 percent, compared
to 23.5 percent over the same time period last year.
"What a difference a year makes. At this time last year, we were
worrying about a number of frothy markets that looked like they
could be on the edge of another housing bubble, places where homes
were appreciating at more than 20 percent per year and where
buyers' heads were spinning just trying to keep up," said Zillow
Chief Economist Dr. Stan Humphries.
"We always knew these market conditions couldn't last, and it's
good to see us now on a more natural and sustained glide path down
toward more normal market conditions of roughly 3 percent annual
appreciation and more balance between buyers and sellers. Home
values should continue to grow, but that growth will increasingly
be driven by traditional market fundamentals like household
formation and job growth, and less by artificial stimulants like
decreased supply and widespread investor demand."
Nationally, rents rose 3.5 percent year-over-year in the third
quarter, to a Zillow Rent Indexv of $1,335,
rising 1.8 percent compared to the second quarter.
Metropolitan
Area
|
Q3 2014
ZHVI
|
Q3 2013
YoY % Change
|
Q3 2014
YoY % Change
|
Q3 2015
Forecasted % Change
|
YoY % Change
in Inventory
|
United
States
|
$176,500
|
6.7%
|
6.5%
|
3.0%
|
18.6%
|
New York,
NY
|
$381,600
|
3.9%
|
5.5%
|
1.6%
|
25.0%
|
Los Angeles,
CA
|
$531,000
|
18.5%
|
8.3%
|
3.0%
|
21.1%
|
Chicago,
IL
|
$188,200
|
6.1%
|
7.4%
|
2.5%
|
20.0%
|
Dallas-Fort Worth,
TX
|
$148,400
|
8.4%
|
6.1%
|
4.4%
|
-5.4%
|
Philadelphia,
PA
|
$202,700
|
2.3%
|
5.2%
|
2.5%
|
12.5%
|
Houston,
TX
|
$150,300
|
11.4%
|
11.8%
|
2.1%
|
-15.2%
|
Washington,
DC
|
$359,300
|
8.3%
|
5.6%
|
0.7%
|
51.4%
|
Miami-Fort
Lauderdale, FL
|
$205,200
|
13.8%
|
15.7%
|
2.5%
|
33.9%
|
Atlanta,
GA
|
$151,900
|
9.7%
|
14.7%
|
5.2%
|
13.9%
|
Boston, MA
|
$362,700
|
7.9%
|
5.0%
|
0.3%
|
21.8%
|
San Francisco,
CA
|
$689,900
|
23.5%
|
8.2%
|
2.9%
|
20.2%
|
Detroit,
MI
|
$113,500
|
20.0%
|
12.6%
|
3.5%
|
27.6%
|
Riverside,
CA
|
$277,900
|
24.0%
|
12.9%
|
7.6%
|
40.3%
|
Phoenix,
AZ
|
$193,700
|
18.0%
|
1.2%
|
2.8%
|
21.7%
|
Seattle,
WA
|
$333,700
|
12.9%
|
6.9%
|
5.0%
|
24.8%
|
Minneapolis-St Paul,
MN
|
$213,100
|
11.2%
|
8.1%
|
2.7%
|
37.2%
|
San Diego,
CA
|
$466,100
|
19.0%
|
6.9%
|
2.6%
|
44.1%
|
St. Louis,
MO
|
$129,100
|
2.3%
|
1.6%
|
2.0%
|
14.8%
|
Tampa, FL
|
$145,400
|
12.4%
|
11.8%
|
3.2%
|
18.6%
|
Baltimore,
MD
|
$241,800
|
5.2%
|
2.7%
|
1.3%
|
36.8%
|
Denver, CO
|
$271,200
|
10.4%
|
11.3%
|
3.8%
|
-10.9%
|
Pittsburgh,
PA
|
$123,800
|
3.9%
|
6.8%
|
3.3%
|
1.1%
|
Portland,
OR
|
$274,100
|
12.3%
|
6.0%
|
3.9%
|
14.8%
|
Sacramento,
CA
|
$325,800
|
23.9%
|
8.9%
|
5.7%
|
35.8%
|
San Antonio,
TX
|
$144,300
|
6.0%
|
5.5%
|
2.9%
|
-2.5%
|
Orlando,
FL
|
$168,100
|
15.3%
|
13.5%
|
5.0%
|
51.1%
|
Cincinnati,
OH
|
$135,900
|
2.8%
|
4.6%
|
2.6%
|
3.4%
|
Cleveland,
OH
|
$120,600
|
2.9%
|
3.3%
|
1.6%
|
6.3%
|
Kansas City,
MO
|
$137,400
|
2.4%
|
5.4%
|
2.4%
|
-0.5%
|
Las Vegas,
NV
|
$181,600
|
28.4%
|
13.4%
|
6.1%
|
39.6%
|
San Jose,
CA
|
$813,500
|
20.2%
|
9.5%
|
4.8%
|
13.3%
|
Columbus,
OH
|
$144,300
|
4.3%
|
7.8%
|
2.4%
|
-6.6%
|
Charlotte,
NC
|
$155,900
|
4.3%
|
6.2%
|
2.0%
|
3.4%
|
Indianapolis,
IN
|
$128,100
|
10.1%
|
-1.5%
|
2.9%
|
7.1%
|
Austin, TX
|
$217,900
|
10.6%
|
11.2%
|
2.9%
|
-6.6%
|
About Zillow:
Zillow, Inc. (NASDAQ: Z) operates the largest home-related
marketplaces on mobile and the Web, with a complementary portfolio
of brands and products that help people find vital information
about homes, and connect with the best local professionals. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Stan
Humphries. Dr. Humphries and his team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Zillow also sponsors the
bi-annual Zillow Housing Confidence Index (ZHCI) which measures
consumer confidence in local housing markets, both currently and
over time. The Zillow, Inc. portfolio
includes Zillow.com®, Zillow Mobile, Zillow
Mortgages, Zillow Rentals, Zillow Digs®, Postlets®, Diverse
Solutions®, Agentfolio®, Mortech®, HotPads™, StreetEasy® and
Retsly™. The company is headquartered in Seattle.
Zillow.com, Zillow, Zestimate, Postlets, Mortech, Diverse
Solutions, StreetEasy, Agentfolio and Digs are registered
trademarks of Zillow, Inc. HotPads and Retsly are trademarks
of Zillow, Inc.
i The Zillow Real Estate Market Reports are a monthly
overview of the national and local real estate markets. The reports
are compiled by Zillow Real Estate Research. For more information,
visit www.zillow.com/research/. The data in Zillow's Real Estate
Market Reports are aggregated from public sources by a number of
data providers for 928 metropolitan and micropolitan areas dating
back to 1996. Mortgage and home loan data are typically recorded in
each county and publicly available through a county recorder's
office. All current monthly data at the national, state, metro,
city, ZIP code and neighborhood level can be accessed at
www.zillow.com/local-info/ and www.zillow.com/research/data.
ii The Zillow Home Value Index is the median estimated
home value for a given geographic area on a given day and includes
the value of all single-family residences, condominiums and
cooperatives, regardless of whether they sold within a given
period. It is expressed in dollars, and seasonally adjusted.
iii The Zillow Home Value Forecast uses data from past
home value trends and current market conditions, including leading
indicators like home sales, months of housing inventory supply and
unemployment, to predict home values over the next 12 months for
the nation and for more than 250 markets across the country.
iv Each week, a count of the number of single-family,
condominium and cooperative housing units listed for sale on Zillow
is taken. The median of these values within a month is calculated
as the monthly value. Because inventory can be seasonal, a
seasonally adjusted value is reported using a standard STL
procedure. This seasonally adjusted series is then smoothed using a
three-month rolling average. More information is available at
www.zillow.com/research.
v The Zillow Rent Index is the median Rent Zestimate®
(estimated monthly rental price) for a given geographic area on a
given day, and includes the value of all single-family residences,
condominiums, cooperatives and apartments in Zillow's database,
regardless of whether they are currently listed for rent. It is
expressed in dollars.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/home-value-growth-has-peaked-cooling-market-puts-bubble-fears-to-rest-378011336.html
SOURCE Zillow, Inc.