Shift Toward Seasonal Norms Could Benefit Buyers, Renters

Though still hot, easing competition in the housing market could reward persistent shoppers

- A less competitive fall market could mean savings for buyers and additional time to decide on a purchase.

- Rent growth slows in line with seasonal norms, with rents falling in eight major metros.

- Although monthly home value appreciation continues to ease, annual appreciation of 19.2% breaks new records.

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Nov 18, 2021, 08:00 ET

SEATTLE, Nov. 18, 2021 /PRNewswire/ -- After ignoring the annual autumn memo to cool down last year, the housing market is finally showing signs of moderation typically seen in the fall, according to Zillow's® latest market report¹.

Zillow logo (PRNewsfoto/Zillow Group)

"Home buyers shopping this fall shouldn't expect the same frenzied demand that triggered bidding wars on listings this spring and summer," said Zillow senior economist Jeff Tucker. "The normal seasonal slowdown of autumn has returned, when many families are busy with back-to-school activities and planning for the holidays. Buyers can expect less competition, meaning more time to decide on a house and the potential for prices to fall on listings they've saved on Zillow."

Although the market is still far hotter than usual, October witnessed normal fall trends of decelerating growth for rents, declining list prices, longer times on market for listings and more homes receiving price cuts before sale. These are indications that seasonality is returning to replace the unfettered growth seen over the past year and a half.

Home value appreciation slowed in October for the third month in a row, as home values rose 1.3% over September, slower than the all-time high monthly appreciation of 2% in July. The typical home value in the U.S. measured by the Zillow Home Value Index (ZHVI) is now up to $312,728. Annual growth of 19.2% ($50,405) is the highest in Zillow data reaching back to 2000.

Home values didn't drop in any of the 50 largest U.S. metros, but monthly home value growth decelerated in 42 of them. The slowest monthly growth was seen in Milwaukee (0.1%), San Francisco (0.3%), Buffalo (0.3%) and St. Louis (0.4%), while the fastest was in Raleigh (2.7%), Nashville (2.4%) and Atlanta (2.3%). The average October monthly appreciation in the U.S. from 2015 through 2019 was 0.4%.

Less frenzied market can benefit buyers
Autumn and winter home shopping seasons usually feature fewer homes on the market, along with less competition. The October report shows inventory down 17.4% from last year and contracting by 1.1% since September, after rising from May through September.

Longer time on the market for listings means buyers have more time to weigh their options and schedule home inspections before purchasing. October listings typically spent 10 days on the market, compared to nine in September and seven in April, May and June.

Median list prices have fallen since July, and the share of homes that saw a price cut before selling rose slightly over September, as well, now standing at 14.7% — nearly double the year's low point in April. The most recent data on the share of homes that sold above list price shows a monthly decline of 6.6% in September to 47.2%, down from a peak of 51.3% in July.

In the midst of a surge in demand last fall, the share of listings with a price cut began a long slide downward in October of 2020, while the share of homes sold above list price was climbing skyward.

Rent growth slows and rents fall in some metros
Rent growth continued on its path of deceleration in October, registering 0.8% month-over-month growth compared to a record high of 2.1% in July. This slowing, too, is in line with seasonal norms — October had the lowest monthly rent appreciation in 2018 and 2019 and saw no growth in 2020 as rents recovered from the shock of the pandemic. Still, the rapid rise in rents since March has pushed annual growth to 14.3%, the highest rate in the series' history, which began in 2015. Typical rents in the U.S. are $1,873, now $234 higher than last October.

Rents fell from September in eight of the 50 largest U.S. metro areas, compared to just one the month before. The largest monthly drops were in Hartford (-1%), Baltimore (-0.6%) and San Jose (-0.5%), while the largest gains came from Miami (2%), Salt Lake City (1.9%) and Orlando (1.8%).

Metropolitan Area*	Zillow Home Value Index (ZHVI)	ZHVI – Year Over Year Change	Days on Market	Share of Listings with a Price Cut	Zillow Observed Rent Index (ZORI)	ZORI – Month Over Month Change
United States	$312,728	19.2%	10	14.7%	$1,873	0.8%
New York, NY	$569,191	13.8%	34		$2,712	1.0%
Los Angeles, CA	$851,308	17.9%	12	11.2%	$2,712	0.9%
Chicago, IL	$286,280	13.8%	12	21.3%	$1,698	0.1%
Dallas–Fort Worth, TX	$332,118	23.3%	17		$1,707	0.5%
Philadelphia, PA	$309,597	16.0%	10	17.2%	$1,747	0.9%
Houston, TX	$272,066	18.8%	13		$1,539	0.6%
Washington, D.C.	$520,598	12.8%	9	18.5%	$2,131	0.6%
Miami–Fort Lauderdale, FL	$381,256	19.7%	15	9.8%	$2,479	2.0%
Atlanta, GA	$322,123	24.7%	8	13.2%	$1,882	1.0%
Boston, MA	$605,224	15.5%	8	13.1%	$2,517	0.8%
San Francisco, CA	$1,346,995	17.0%	12	9.9%	$3,082	0.1%
Detroit, MI	$225,066	17.1%	10	17.3%	$1,394	0.9%
Riverside, CA	$525,941	27.7%	12	12.4%	$2,455	0.2%
Phoenix, AZ	$418,170	32.7%	11	13.7%	$1,848	1.1%
Seattle, WA	$695,058	21.8%	7	12.5%	$2,181	0.2%
Minneapolis–St. Paul, MN	$349,595	13.6%	16	16.8%	$1,606	-0.2%
San Diego, CA	$814,289	25.1%	9	13.2%	$2,717	1.3%
St. Louis, MO	$220,861	14.6%	6	16.1%	$1,201	0.3%
Tampa, FL	$316,379	28.7%	6	15.8%	$1,973	1.4%
Baltimore, MD	$349,655	12.8%	8	18.5%	$1,745	-0.6%
Denver, CO	$574,734	22.0%	6	17.2%	$1,907	-0.1%
Pittsburgh, PA	$200,185	17.4%	9	20.0%	$1,279	0.2%
Portland, OR	$532,300	19.2%	7	17.1%	$1,831	-0.1%
Charlotte, NC	$324,163	24.8%	6	14.2%	$1,695	0.5%
Sacramento, CA	$567,023	24.0%	8		$2,220	0.5%
San Antonio, TX	$265,602	20.2%	9	16.0%	$1,387	0.0%
Orlando, FL	$328,555	20.3%	8	13.6%	$1,856	1.8%
Cincinnati, OH	$236,963	17.3%	5	17.5%	$1,430	1.1%
Cleveland, OH	$199,110	16.7%	7	17.4%	$1,228	-0.2%
Kansas City, MO	$259,200	18.5%	4	15.6%	$1,247	1.1%
Las Vegas, NV	$385,325	25.0%	9	16.2%	$1,786	0.7%
Columbus, OH	$266,594	16.9%	4	17.8%	$1,384	0.9%
Indianapolis, IN	$235,663	18.1%	5	16.1%	$1,407	0.1%
San Jose, CA	$1,493,020	16.7%	14	9.4%	$3,087	-0.5%
Austin, TX	$527,134	44.3%	18	13.9%	$1,785	0.6%
Virginia Beach, VA	$295,626	14.6%	21		$1,555	0.8%
Nashville, TN	$374,406	22.9%	5		$1,785	0.9%
Providence, RI	$411,467	20.1%	10	13.3%	$1,800	0.4%
Milwaukee, WI	$251,032	15.5%	33	15.6%	$1,148	-0.1%
Jacksonville, FL	$308,552	24.9%	7	14.9%	$1,694	0.5%
Memphis, TN	$201,846	18.4%	20		$1,441	0.9%
Oklahoma City, OK	$192,346	14.3%	6		$1,221	0.2%
Louisville–Jefferson County, KY	$220,485	13.9%	6	19.1%	$1,103	0.0%
Hartford, CT	$294,010	16.6%	8	15.3%	$1,546	-1.0%
Richmond, VA	$298,298	14.5%	6		$1,471	1.0%
New Orleans, LA	$249,800	13.7%	12	13.9%	$1,346	0.2%
Buffalo, NY	$225,277	22.2%	11	14.2%	$1,149	0.3%
Raleigh, NC	$384,170	28.3%	5	10.0%	$1,661	0.6%
Birmingham, AL	$212,919	15.6%	6	12.1%	$1,310	0.5%
Salt Lake City, UT	$539,824	28.4%	7	19.0%	$1,584	1.9%

*	Table ordered by market size

¹	The Zillow Real Estate Market Reports are monthly overviews 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 the Zillow Real Estate Market Reports is 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 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 levels can be accessed at www.zillow.com/research/data.

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SOURCE Zillow