2013 Spring Selling Season Was Hottest Since 2004 As Recovery Accelerates & Widens
All Corners of U.S. Saw Annual Appreciation in Q2, According to Second Quarter Zillow Real Estate Market Reports; But Slowdown in Rent Appreciation, Affordability Concerns Point to Changing Landscape
SEATTLE, July 23, 2013 /PRNewswire/ -- The national housing recovery kicked into high gear in the second quarter as home value appreciation spread and accelerated after a relatively slow start to the year, according to the second quarter Zillow® Real Estate Market Reports[i]. The U.S. Zillow Home Value Index[ii] rose to $161,100 as of the end of the second quarter, up 5.8 percent year-over-year and 2.4 percent from the first quarter, the largest annual gain since August 2006 and largest quarterly gain since the fourth quarter of 2005.
National home values rose just 0.25 percent during the first quarter. The 2.4 percent quarterly rise in the second quarter was the sixth straight quarter of appreciation and represents the largest second quarter gain since 2004.
Not only did the pace of home value appreciation quicken in the second quarter, but the recovery also fully took hold nationwide. Markets in some areas of the Northeast, Midwest and Southeastern U.S. that had previously been slow to turn the corner began to appreciate, which helped boost the overall national market. All of the top 30 largest metro areas covered by Zillow experienced annual appreciation as of the end of the second quarter, and all have hit their bottom. Metros with the largest annual gains in the second quarter included Sacramento (29.5 percent), Las Vegas (29.4 percent) and San Francisco (25.5 percent).
Home values are expected to rise another 5 percent over the next 12 months, according to the Zillow Home Value Forecast[iii]. Of the 30 largest metro areas, 29 are expected to show home value appreciation in the next year, with only the New York metro expected to fall (-0.8 percent). Metros expected to see the highest appreciation rates through June 2014 include Sacramento (18.9 percent), Riverside, Calif., (16.6 percent) and Phoenix (11 percent). But as home values continue to rise along with mortgage interest rates, and different kinds of buyers and sellers enter and exit the market, the landscape will change.
"The U.S. housing market as a whole is currently not experiencing a bubble, but in many places it sure must feel like one, with some markets experiencing annual home value appreciation approaching 30 percent. Homeowners are feeling a sense of whiplash after years of depreciation, but this kind of market behavior won't last," said Zillow Senior Economist Svenja Gudell. "Investors are starting to pull out of some markets and regular buyers are coming back, and more inventory is slowly but surely coming on line, both of which will contribute to slowdowns in appreciation. Additionally, in some overheated markets, rapid home value increases coupled with rising mortgage rates will lead to housing prices and financing costs outpacing local income growth, which will also contribute to a moderation of the market. Combined, all of these factors will help the market in the second half of 2013 and beyond normalize and become much more steady than it has been in these past six months."
In the rental market, national rents fell in the second quarter compared with the first quarter by 0.5 percent, to a Zillow Rent Index[iv] of $1,282, the first quarterly decline after nine consecutive quarters either increasing or remaining flat. Year-over-year, national rents rose 1.6 percent as of the end of the second quarter.
Foreclosure rates also fell in the second quarter compared with the first quarter. A total of 4.96 out of every 10,000 homes nationwide were foreclosed upon in the second quarter, down 0.7 homes per 10,000 from the first quarter and down 1.6 homes per 10,000 year-over-year.
Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 350 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. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs™, Postlets®, Diverse Solutions®, Mortech™, HotPads™ and Agentfolio™. The company is headquartered in Seattle.
Zillow.com, Zillow, Zestimate, Postlets and Diverse Solutions are registered trademarks of Zillow, Inc. Mortech, HotPads, Digs and Agentfolio are 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 is aggregated from public sources by a number of data providers for 932 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 level can be accessed at www.zillow.com/local-info/.
[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 Home Value Forecast 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.
[iv] 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.
SOURCE Zillow, Inc.