In the expansion following the recession, the conversation in housing has lingered on markets like Denver, Portland and Seattle—places where prices have risen sharply, and demand is discouragingly mismatched with supply. Now, the hottest markets’ prices are slowing, according to recently released research.
The July Zillow® Real Estate Market Report—based on the Zillow Home Value Index (ZHVI)—found that growth is mostly softening out West. Denver home prices were up 7.1 percent in July—a decline from 8.7 percent in July 2017. In Los Angeles, prices were up 6.2 percent, a dip from 7.3 percent the prior year. The rate in Riverside, similarly, was 7 percent, a drop from 8 percent the prior year. In Portland, Ore., and Seattle, prices were up 5.7 percent and 9.1 percent, respectively, sinking from 9 percent and 14.2 percent.
Exceptions are San Francisco, which grew from 6.9 percent last year to 10.4 percent this year, and San Jose, which grew from 8.4 percent to 26 percent.
One outlier is Tampa, where appreciation has decelerated from 14.2 percent to 10.6 percent.
“The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,” says Aaron Terrazas, senior economist at Zillow.
Still, appreciation is strong, nationally at 8 percent year-over-year, according to the report. In July, the median rose to $218,000—a record—and growth is higher, historically, in the majority of markets in the report.
“Despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market,” Terrazas says. “In many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money—but it’s clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift.”
For more information, please visit www.zillow.com.