Housing markets in the South are experiencing higher levels of appreciation than those in California, which had been at the forefront of rising values, according to the Zillow Real Estate Market Reports for January. Appreciation in Nashville, Tenn., surpassed that of leader Portland, Ore., at a year-over-year rate of 12.4 percent. Home values in Dallas-Fort Worth, Texas, and Tampa and Orlando, Fla., appreciated more than 10 percent year-over-year.
Appreciation in California’s most coveted markets, however, lagged. Home values in San Francisco appreciated 4.4 percent year-over-year, while those in San Jose appreciated 4.0 percent. Rents in San Jose, in addition, fell 0.1 percent.
“We spend a lot of time focusing on the West Coast, but powerhouse markets exist throughout the country,” says Dr. Svenja Gudell, Zillow chief economist. “Florida and Texas home values have grown quite a bit over the past several years, stealing the spotlight from slower moving markets like San Francisco, San Jose and Los Angeles. Slowdowns in the Bay Area, in particular, are driven by the fact that these markets are so expensive that many people can no longer realistically afford to buy there, limiting demand and reducing pressure on home values. Despite recent increases in the national pace of home value appreciation, I expect a nationwide slowdown in 2017 as some headwinds begin blowing in, including increasing mortgage rates and worsening affordability.”
Home values overall have risen 7.2 percent year-over-year, with the Zillow Home Value Index (ZHVI) at $195,300. Rents have also risen—though notedly less than home values—at 1.4 percent year-over-year to a Zillow Rent Index (ZRI) of $1,404.
Housing inventory nationally continued on a downward track, tumbling 3 percent year-over-year, according to the reports. Minneapolis-St. Paul, Minn., and Detroit, Mich., experienced the most declines, down 17.7 percent and 16.8 percent, in order.
For more information, please www.zillow.com.
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