Zillow: Record Home Prices in One-Fourth of U.S. Housing Markets
Zillow Inc., Seattle, said steady home value growth allowed many housing markets to eclipse previous records set during the housing bubble, even in the hard-hit South and North Central regions.
Zillow’s February Real Estate Market Reports said median home values in more than one-fourth of the nation’s metro housing markets are currently, or were recently, as high as they’ve ever been, exceeding previous records set at the top of the housing bubble.
Over the past year, housing markets in the South, especially Texas and Tennessee, joined Western housing markets in median home value highs. Dallas home values set a record at $180,700 in February, up 13.7 percent from a year ago. Louisville, Ky. values rose by 13.2 percent to $146,100, while Nashville home values rose by 9.5 percent to $189,100.
The national Zillow Home Value Index reached $184,600 in February, just 5.9 percent below the record median home value set in mid-2007.
Zillow Chief Economist Svenja Gujdell said record-high prices, combined with low inventory, make it difficult to buy a home in many markets, especially for renters trying to save for a down payment amongst historically high rental costs.
“These new records mean we’re no longer making up ground lost during the housing recession–we’re laying a new path forward, based on demand for housing and economic growth throughout the economy” Gudell said. “In some markets, these new highs are a return to normalcy. The fact that other markets are still off by double digits may not mean those markets are far from being recovered. It just highlights how extraordinarily inflated home values had been during the housing bubble.”
The report said median home values in hot Western markets such as Denver and San Jose continued to zoom past previous highs with double-digit growth, but other markets have more quietly surpassed their previous peaks and continue to grow.
Analysts surveyed in the November Zillow Home Price Expectations Survey expressed concern that homes in San Francisco, Seattle, San Diego and Los Angeles are overvalued and approaching bubble conditions.
Zillow reported its Rent Index continued to rise in February, but at a slower rate, as new construction provided supply to rental markets. Of the top 35 metros, only San Francisco saw double digit rent appreciation, on an annual basis, at 10.5 percent.
Zillow said rents are rising at 2.6 percent year-over-year, in-line with income growth expectations for the year.
