Housing Recovery Entering Middle Innings in 2014, as Local Market Performances Are Expected to Vary Widely
In Q4 2013, Appreciation Slowed from Summer Peaks; Formerly Boiling Markets like Bay Area Reduced to a Simmer, According to Zillow Fourth Quarter Real Estate Market Reports
- U.S. home values ended 2013 up 6.4 percent year-over-year, to a Zillow Home Value Index of $169,100.
- National annual appreciation rate expected to slow to 4.8 percent by end of 2014.
- Home values in Denver and Pittsburgh metros ended 2013 above their pre-recession peaks.
SEATTLE, Jan. 23, 2014 /PRNewswire/ -- National home values completed 2013 on a high note, ending the fourth quarter up 6.4 percent year-over-year, a robust bounce off the bottom that is beginning to tail off in most areas and could cause problems in a handful, according to the fourth quarter Zillow® Real Estate Market Reportsi. The U.S. Zillow Home Value Indexii stood at $169,100 as of the end of the fourth quarter, up 1.4 percent from the end of the third quarter, and 0.6 percent from November. After peaking at 7.1 percent in August, the pace of annual home value appreciation fell below 7 percent throughout the fourth quarter.
Metro markets that were earliest to begin their recoveries and that had been showing the most robust home value appreciation throughout much of the year, including Southern California and the Bay Area, largely cooled off in the fourth quarter. Annual appreciation rates in Los Angeles, San Diego, San Francisco and San Jose slowed or were flat in each month of the fourth quarter compared to the month prior, a welcome sign in markets that risk crossing over into bubble territory as rising mortgage interest rates create affordability issues for homebuyers.
Looking ahead:
As the market enters 2014, national appreciation rates are expected to slow considerably. Nationwide, home values are expected to rise another 4.8 percent through December 2014, according to the Zillow Home Value Forecastiii. But local market conditions will not necessarily follow national conditions, a trend that may cause confusion and uncertainty among homebuyers and sellers. Zillow expects all but one of the nation's 35 largest metro areas (St. Louis, -3.1 percent) to show appreciation this year, but the expected annual appreciation rates vary from 16.1 percent in Riverside, Calif., to just 0.4 percent in Kansas City. None will approach the often breakneck pace set in 2013.
"The housing recovery is entering the middle innings after an incredible run in 2013. Below the surface of last year's market, a number of unsettling trends started to emerge as a result of rapid and ultimately unsustainable appreciation, setting up a bit of a mixed bag for 2014," said Zillow Chief Economist Dr. Stan Humphries. "Affordability issues will help put the brakes on many markets that saw huge appreciation rates, like California and the Southwest, creating volatility that could potentially cause whiplash for homebuyers and sellers. At the same time, we expect more homes to be available this year as more sellers enter the market and more homes get built, and a decline in investor competition should make for a more hospitable market for many buyers. While a truly 'normal' market remains a ways off, we expect to take more steps in that direction as appreciation moderates, negative equity recedes, federal stimulus is withdrawn and foreclosures wane."
Among the largest 35 metro markets covered by Zillow, all but three (St. Louis, -3.8 percent; Indianapolis, -2.1 percent; and San Antonio, -0.8 percent) showed annual appreciation in 2013. Home values in two of the top 35 metros, Denver and Pittsburgh, ended 2013 above their pre-recession peaks.
National rents rose by 0.7 percent in the fourth quarter compared with the third quarter, to a Zillow Rent Indexiv of $1,302. Year-over-year, rents nationwide rose 2.4 percent. A total of 4.84 out of every 10,000 homes nationwide were foreclosed upon as of the end of the fourth quarter, down 0.4 homes per 10,000 from the third quarter and down 1.2 homes per 10,000 year-over-year.
| Metropolitan Areas |
Zillow Home Value Index |
Zillow Home Value Forecast |
||||
| Q4 2014 |
Month-Over-Month Change |
Year-Over-Year Change |
Bottom in Home Values |
Change in ZHVI, Q4-2013-Q4 2014 |
||
| United States |
$169,100 |
0.6% |
6.4% |
2012-01 |
4.8% |
|
| New York, NY |
$367,500 |
0.4% |
6.1% |
2012-06 |
3.0% |
|
| Los Angeles, CA |
$500,400 |
1.0% |
18.9% |
2012-02 |
8.7% |
|
| Chicago, IL |
$178,000 |
1.1% |
9.5% |
2012-05 |
3.6% |
|
| Dallas-Fort Worth, TX |
$143,600 |
-0.2% |
4.4% |
2011-11 |
2.6% |
|
| Philadelphia, PA |
$193,200 |
0.1% |
2.9% |
2012-08 |
1.5% |
|
| Houston, TX |
$142,500 |
-0.7% |
3.2% |
2013-12 |
1.3% |
|
| Washington, DC |
$344,900 |
0.7% |
9.5% |
2011-10 |
3.7% |
|
| Miami-Fort Lauderdale, FL |
$183,400 |
0.9% |
17.5% |
2011-09 |
6.3% |
|
| Atlanta, GA |
$136,300 |
1.5% |
15.6% |
2012-07 |
7.7% |
|
| Boston, MA |
$350,800 |
0.6% |
8.4% |
2011-12 |
2.8% |
|
| San Francisco, CA |
$642,900 |
0.8% |
20.4% |
2012-02 |
7.5% |
|
| Detroit, MI |
$105,300 |
1.5% |
21.0% |
2011-10 |
6.2% |
|
| Riverside, CA |
$256,400 |
1.1% |
27.9% |
2012-02 |
16.1% |
|
| Phoenix, AZ |
$188,200 |
0.3% |
11.8% |
2011-01 |
3.6% |
|
| Seattle, WA |
$309,100 |
0.3% |
10.3% |
2012-01 |
5.9% |
|
| Minneapolis-St Paul, MN |
$199,000 |
0.6% |
10.0% |
2012-01 |
2.9% |
|
| San Diego, CA |
$439,800 |
0.6% |
17.4% |
2012-01 |
6.8% |
|
| St. Louis, MO |
$130,300 |
-1.4% |
-3.8% |
2012-04 |
-3.1% |
|
| Tampa, FL |
$134,400 |
1.1% |
16.3% |
2011-12 |
7.4% |
|
| Baltimore, MD |
$237,000 |
0.5% |
5.9% |
2012-04 |
3.3% |
|
| Denver, CO |
$244,200 |
0.5% |
9.0% |
2011-10 |
2.8% |
|
| Pittsburgh, PA |
$119,300 |
0.1% |
6.0% |
2008-03 |
2.3% |
|
| Portland, OR |
$259,800 |
0.5% |
11.5% |
2012-01 |
4.8% |
|
| Sacramento, CA |
$305,500 |
0.9% |
23.7% |
2012-02 |
11.6% |
|
| San Antonio, TX |
$143,000 |
-1.6% |
-0.8% |
2011-03 |
1.2% |
|
| Orlando, FL |
$153,000 |
1.4% |
19.3% |
2012-02 |
10.1% |
|
| Cincinnati, OH |
$131,300 |
0.2% |
4.3% |
2012-11 |
1.0% |
|
| Cleveland, OH |
$116,300 |
0.0% |
2.2% |
2012-03 |
0.8% |
|
| Kansas City, MO |
$137,700 |
-0.8% |
1.5% |
2011-10 |
0.4% |
|
| Las Vegas, NV |
$167,400 |
0.7% |
28.1% |
2012-02 |
7.9% |
|
| San Jose, CA |
$741,500 |
0.2% |
15.6% |
2011-08 |
5.3% |
|
| Columbus, OH |
$137,500 |
1.3% |
8.2% |
2012-02 |
4.0% |
|
| Charlotte, NC |
$147,200 |
0.5% |
6.0% |
2012-03 |
2.4% |
|
| Indianapolis, IN |
$117,600 |
-2.2% |
-2.1% |
2011-10 |
1.2% |
|
| Austin, TX |
$197,600 |
-0.5% |
4.7% |
2013-12 |
1.1% |
|
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. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs™, Postlets®, Diverse Solutions®, Agentfolio®, Mortech®, HotPads™ and StreetEasy®. The company is headquartered in Seattle.
Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, StreetEasy and Agentfolio are registered trademarks of Zillow, Inc. HotPads and Digs 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 is aggregated from public sources by a number of data providers for 929 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data is 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 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, and is not seasonally adjusted.
SOURCE Zillow, Inc.
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