Nationally, homes appreciated 3.3 percent from a year ago, rising to a Zillow Home Value Indexof $180,800. The national growth rate has leveled off over the past five months, suggesting the housing recovery is ending and the market is returning to normal. However, 27.9 percent of homes lost value over the past year. Before the housing market crashed, an average of 21.2 percent of homes were losing value. In December 2008, 81.6 percent of homes lost value, the highest amount during the recession.
Markets on the East Coast and in the Midwest had the highest share of homes that lost value. A staggering 48.1 percent of homes in Baltimore decreased in value over the past year. Philadelphia (43.4 percent) and Washington, DC (41.2 percent) also had large shares of homes losing value.
Conversely, few homes lost value in hot markets like Denver, Dallas, San Jose, and San Francisco, which all saw double-digit home value growth over the past year. Less than five percent of homes in Denver (1.5 percent) and Dallas (4 percent) were worth less in August 2015 than they were a year ago.
“We’re not going in reverse, but we are hitting the brakes a bit in some markets,” says Zillow Chief Economist Dr. Svenja Gudell. “It’s easy to say the recession is over when a third of the biggest markets are more expensive now than ever before, but we’re still seeing a number of homes losing value. The reality is there are still areas lagging behind in the recovery.”
Renters looking to become homeowners may find more opportunities in slower markets like Philadelphia. According to the January 2015 Zillow Housing Confidence Index, when home values there were growing at 2.8 percent annually, eight percent of renters in the area says they planned to buy within a year. This jumped to 18 percent in the most recent survey, when home value growth was nearly flat at 0.3 percent.
Rents are still growing faster than home values. The Zillow Rent Index rose 3.8 percent on an annual basis to $1,381, giving potential buyers another reason to consider entering the market.
For more information, visit www.zillow.com.