Real Estate Becomes Local Again; National Trends Less Prevalent on a Market Level
Economic factors in May, including job growth and household formation, varied greatly from metro-to-metro as house hunting season got into full swing
- U.S. home values rose 3 percent year-over-year in May, but values in the nation's hottest markets were rising four or more times that fast.
- Rents were outpacing home value growth nationally and in 20 of the 35 largest U.S. housing markets.
- Home value growth is expected to slow further in the second half of the year as the for-sale housing market stabilizes.
SEATTLE, June 23, 2015 /PRNewswire/ -- Bidding wars are helping drive up home values in the nation's hottest housing markets this home shopping season, even as home values level off far below the record levels set during the real estate bubble in quieter markets, according to the May Zillow® Real Estate Market Reports[i].
The country by-and-large rode the same big roller coaster through the housing bubble, bust, and recovery. May's report shows local markets diverging, with some chugging along, some stalled out and some continuing to accelerate amid rising prices and competition.
"What we're seeing is the passing of the baton – as mortgage rates begin to rise and incomes and household formation rates increase – from a stimulus-driven housing market to one driven by fundamentals," said Zillow Chief Economist Dr. Stan Humphries. "This transition from housing recovery to a more normal market is a good thing in the long-term, but we can expect some bumps along the way. In the end, increasing household formation and stronger income growth should be able to overcome the headwind of rising mortgage rates and return markets to health."
U.S. home values grew at an annual rate of 3 percent in May, to a Zillow Home Value Index[ii] of $179,200. National home values were still nearly 9 percent below the housing-bubble peak of $196,400, a record set in April 2007, before the housing bust drove the country into a prolonged recession.
Denver home values grew 14.7 percent year-over-year in May, to a median just under $300,000. Home values have never been as high there. San Jose metro home values topped out at $883,200, higher even than San Francisco's median of $746,600. Both Bay Area markets saw double-digit growth driven by low interest rates, low inventory, and high job growth.
Florida markets in Tampa, Miami-Fort Lauderdale and Orlando remained more than 30 percent under their peak. While home values continued to grow there, they have been growing more slowly each month since last summer. In all three markets, home values are growing at around half the pace they were a year ago.
Las Vegas home values slowed to a year-over-year growth rate of just 6.3 percent, and remained 38.6 percent below the peak set in 2006.
Rents continued to outpace home values in 20 of the 35 largest metro areas. The Zillow Rent Index (ZRI) [iii] rose 4.3 percent year-over-year, to $1,367.
Some markets are seeing rapidly rising rents even as home values appreciate more slowly. Kansas City median home values were essentially flat, rising two-tenths of a percent in the past year. But rents were up more than 10 percent.
Over the next year, home value growth is expected to slow even further, to 2.2 percent annually, according to the Zillow Home Value Forecast[iv]. In 2014, home values rose 4.9 percent.
| Zillow Home Value Index (ZHVI) |
Zillow Rent Index (ZRI) |
Zillow Home Value Forecast (ZHVF) |
|||
| Metro |
May 2015 ZHVI |
Year-over-Year % Change in ZHVI |
May 2015 ZRI |
Year-over-Year % Change in ZRI |
Expected Year-over-year % ZHVI Change for May 2016 |
| United States |
$179,200 |
3.0% |
$ 1,367 |
4.3% |
2.2% |
| New York – Northern New Jersey |
$378,800 |
-0.1% |
$ 2,357 |
2.3% |
-1.2% |
| Los Angeles, CA |
$536,000 |
2.8% |
$ 2,505 |
5.6% |
0.9% |
| Chicago, IL |
$188,000 |
1.4% |
$ 1,620 |
-0.4% |
1.9% |
| Dallas-Fort Worth, TX |
$162,200 |
11.7% |
$ 1,470 |
5.7% |
7.0% |
| Philadelphia, PA |
$200,400 |
0.3% |
$ 1,574 |
3.1% |
0.6% |
| Houston, TX |
$158,900 |
7.7% |
$ 1,518 |
5.9% |
3.3% |
| Washington, DC |
$359,700 |
0.4% |
$ 2,107 |
2.1% |
-0.6% |
| Miami-Fort Lauderdale, FL |
$216,000 |
9.4% |
$ 1,802 |
3.5% |
1.2% |
| Atlanta, GA |
$155,900 |
6.5% |
$ 1,251 |
5.2% |
3.2% |
| Boston, MA |
$361,600 |
0.2% |
$ 2,191 |
5.5% |
-0.9% |
| San Francisco, CA |
$746,600 |
10.7% |
$ 3,198 |
15.0% |
5.3% |
| Detroit, MI |
$115,300 |
5.4% |
$ 1,123 |
6.0% |
3.2% |
| Riverside, CA |
$286,100 |
5.2% |
$ 1,677 |
3.8% |
5.2% |
| Phoenix, AZ |
$202,500 |
4.6% |
$ 1,256 |
5.6% |
2.8% |
| Seattle, WA |
$352,500 |
7.5% |
$ 1,867 |
6.4% |
6.7% |
| Minneapolis-St Paul, MN |
$211,400 |
2.8% |
$ 1,517 |
0.4% |
1.9% |
| San Diego, CA |
$477,400 |
4.2% |
$ 2,334 |
5.1% |
1.2% |
| St. Louis, MO |
$134,400 |
3.9% |
$ 1,135 |
4.9% |
3.1% |
| Tampa, FL |
$150,900 |
6.5% |
$ 1,283 |
4.1% |
2.5% |
| Baltimore, MD |
$241,000 |
-0.3% |
$ 1,736 |
2.9% |
-0.3% |
| Denver, CO |
$297,700 |
14.7% |
$ 1,890 |
12.6% |
5.7% |
| Pittsburgh, PA |
$124,000 |
1.7% |
$ 1,099 |
0.6% |
1.6% |
| Portland, OR |
$286,200 |
5.5% |
$ 1,629 |
9.8% |
5.4% |
| Sacramento, CA |
$339,100 |
6.1% |
$ 1,664 |
6.5% |
5.2% |
| San Antonio, TX |
$148,100 |
2.2% |
$ 1,321 |
4.8% |
3.7% |
| Orlando, FL |
$171,200 |
4.9% |
$ 1,326 |
2.5% |
2.7% |
| Cincinnati, OH |
$136,900 |
1.8% |
$ 1,255 |
6.6% |
2.4% |
| Cleveland, OH |
$120,600 |
0.6% |
$ 1,160 |
2.6% |
2.4% |
| Kansas City, MO |
$140,200 |
0.2% |
$ 1,247 |
10.2% |
3.7% |
| Las Vegas, NV |
$187,700 |
6.3% |
$ 1,203 |
2.2% |
4.9% |
| San Jose, CA |
$883,200 |
11.9% |
$ 3,338 |
13.2% |
4.7% |
| Columbus, OH |
$146,900 |
3.2% |
$ 1,262 |
2.5% |
2.8% |
| Charlotte, NC |
$159,800 |
4.0% |
$ 1,251 |
6.0% |
2.7% |
| Indianapolis, IN |
$131,100 |
1.0% |
$ 1,201 |
2.0% |
3.9% |
| Austin, TX |
$228,900 |
7.2% |
$ 1,686 |
5.6% |
3.7% |
About Zillow:
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. In 2015, Dr. Humphries co-wrote and published the New York Times' bestselling "Zillow Talk: The New Rules of Real Estate." 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. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z), and headquartered in Seattle.
Zillow and Zestimate are registered 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 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
[iv] This expectation is based on the Zillow Home Value Forecast, which 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.
SOURCE Zillow
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