Zillow: Home Values Grow at Fastest Pace in Two Years
U.S. home values rose by 5.5 percent over the past year, the fastest pace of appreciation in more than two years, said Zillow Inc., Seattle.
The company’s September Real Estate Market Reports said the median value of a U.S. home rose to $189,400.
Portland, Dallas and Seattle reported the highest year-over-year home value appreciation among the 35 largest metros across the country. In Portland, home values rose by nearly 15 percent to a median value of $342,100. Home values in Dallas and Seattle appreciated by 12 and 11 percent, respectively. For the first time, the median home value in the Seattle surpassed $400,000 and is now at $401,100.
Zillow reported steady drops in inventory, with 4-6 percent fewer homes for sale over the past several months. However, Zillow Chief Economist Svenja Gudell said the bigger driver of home prices is increased demand, noting sales have increased substantially since 2011, despite fewer homes on the market.
“Increasingly strong demand has been contributing to dwindling inventory stocks across the nation,” Gudell said. “Healthy demand for for-sale homes amidst low inventory has been driving the market, which is another sign that the housing market is recovering nicely. Buyers in the nation’s fastest moving markets can expect the search process to last a few months, as market conditions are often extremely competitive with homes selling for above asking price and receiving multiple offers. It’s definitely a seller’s market right now, with some homes being more expensive than ever.”
Zillow reported bidding wars as commonplace in many housing markets, with multiple buyers compete for the same home. According to the Zillow Group Consumer Housing Trends Report, only 46 percent of buyers get the first home on which they make an offer, and the home search takes an average of 4.2 months.
The report also noted rents rising across the nation, but have slowed considerably over the past year. A year ago, median rents were up 5.3 percent year-over-year but have since slowed to 1.5 percent annual appreciation. The median rent in the U.S. is now $1,403.
Seattle, Portland and Sacramento reported the highest year-over-year rent appreciation among the 35 largest U.S. housing markets. Rents in Seattle are up by 9 percent; in Portland, rents rose by 7 percent. For the fourth month in a row, Seattle saw the fastest year-over-year rent appreciation among the 35 largest U.S. housing markets.
Zillow noted 6 percent fewer homes for sale nationally from a year ago, with Indianapolis and Boston reporting the greatest drop in inventory. Indianapolis reported 26 percent fewer homes to choose from than a year ago, while Boston reported 25 percent fewer homes.
