
Home Values at Record Highs in Nearly Half of Largest Markets
The median U.S. home is $4,100 more valuable now than at the housing bubble’s peak a decade ago, said Zillow Inc., Seattle.
Zillow also reported nearly half of the largest U.S. housing markets have surpassed peak home values hit during peak bubble years from a decade ago. Forty-eight percent of individual homes nationwide are currently worth more than they were prior to the onset of the Great Recession.
The company’s July Real Estate Market Report said national home values rose by 6.8 percent over the past year, to $200,700.
Zillow said home values in Denver, Dallas and San Jose have appreciated most beyond the previous record-highs set at the peak of the housing bubble in the mid-2000s. Homes in Denver are nearly 60 percent more valuable now than during the bubble, increasing from a median home value of $235,900 in April 2006 to a current median home value of $371,100.
“An abundance of well-paying jobs in Portland, San Francisco and Seattle has quickly driven up home values as job seekers flood these markets looking for new opportunities,” the report said. In Portland, the median home value is 26 percent higher now than during peak bubble years and 20 percent higher in San Francisco and Seattle. In Denver, 99.5 percent of homes are worth more now than during the peak of the housing bubble, but in Las Vegas, less than 1 percent of homes are more valuable.
“Home values are high, but affordability–while suffering a bit lately–is still okay, largely because of very low mortgage interest rates helping to keep monthly mortgage payments in check,” said Zillow Chief Economist Svenja Gudell. “The more pressing issue is abnormally low inventory, which is translating into an extremely competitive environment for home shoppers. Bidding wars and homes selling for over asking price have been common themes in many markets this summer, and continued competition in the face of limited supply will only continue to push home values up going forward. Home shoppers that were hoping to buy this summer but haven’t yet found their dream home may have better luck once September and October roll around, when we can expect to see more homes coming online and less competition.”
Seattle, Dallas and Tampa, Fla. reported the greatest year-over-year home value appreciation between July 2016 and July 2017 among the 35 largest U.S. metros. In Seattle, home values rose almost 13 percent over the past year to a median home value of $450,900.
Clear Capital, Reno, Nev., noted even Detroit, traditionally a poor performer, showed new life, with home prices rising quarter over quarter by 1.3 percent. Detroit was the only Midwest metro to crack the company’s monthly Home Data Index report top 15 performing markets.
“Considering just four years prior, Detroit was the largest city in U.S. history to file for Chapter 9 Bankruptcy protection, and to see a bounce back across the city’s quarter-over-quarter home price appreciation is both impressive and encouraging news for the industry and region,” said Clear Capital CEO and Co-Founder Duane Andrews.
Clear Capital said other Midwest metros are stalling or showing stagnant quarter-over-quarter growth. Four Ohio MSAs, Dayton, Cincinnati, Columbus and Cleveland, are among the slowest growing markets with quarter-over-quarter rates all at or below 0.2 percent. Chicago growth continues to stall and is down from 1.3 percent to 1.1 percent since last month. Furthermore, Milwaukee’s negative growth from last month, has increased slightly from -0.2 percent to 0.3 percent quarter-over-quarter growth.
Zillow said median rents rose by 1.6 percent from a year ago, the fastest pace of appreciation since December 2016, to a median payment of $1,427 per month. Seattle, Sacramento, Calif. and Los Angeles reported the greatest rent growth over the past year. In Seattle and Sacramento, rents rose by nearly 5 percent since last July. In Los Angeles, rents rose just over 4 percent to $2,696.