More Inventory Slows Home Value Growth in January, Setting Up More of a Buyers' Market This Spring

- U.S. home values rose 0.2 percent in January from December, the slowest monthly pace in 18 months.

- Inventory rose in 22 of the nation's 35 largest metro areas covered by Zillow.

- Phoenix, Las Vegas and Sacramento seeing biggest increases in supply of for-sale homes.

- Home values are expected to rise another 3.4 percent over the next 12 months.

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Feb 20, 2014, 08:00 ET

SEATTLE, Feb. 20, 2014 /PRNewswire/ -- National home values rose just 0.2 percent in January from December to a Zillow® Home Value Indexⁱ of $169,600, the smallest monthly increase since May 2012, as more inventory of for-sale homes helped slow previously high rates of appreciation, according to the January Zillow Real Estate Market Reportsⁱⁱ. Nationwide, while inventory remains tight, the number of homes listed for sale on Zillow was up 11.1 percent annually in Januaryⁱⁱⁱ on a seasonally adjusted basis, the fifth straight month of rising year-over-year inventory.

Inventory rose year-over-year in 22 of the nation's 35 largest metro areas covered by Zillow, with the largest inventory gains coming in some of the areas that were hit hardest by the housing recession, including Las Vegas (up 42.8 percent), Phoenix (up 30.5 percent) and Sacramento (up 26 percent). These metros also experienced significant cooling in the pace of home value appreciation in January, as buyers had more homes to choose from and were less apt to engage in the kinds of bidding wars that helped drive prices up so quickly last year.

"Last year, tight inventory contributed to very rapid home value appreciation. Now, more inventory is helping to moderate home value increases in many areas. This increased supply is coming from many sources, as more sellers are free to list their homes after being released from negative equity, builders continue to ramp up construction and many homeowners decide to list their homes and capitalize on recent gains," said Zillow Chief Economist Dr. Stan Humphries. "As the market shakes off a long winter and gears up for the spring season, we should see buyers gaining a bit more leverage this year than they've had in the past, with more choice and less competition. This slightly more balanced market is another step on the road back to normal, and will help offset the impact of rising mortgage rates and more expensive homes for buyers."

Year-over-year, U.S. home values rose 6.3 percent in January, down from peak gains of 7.1 percent in August 2013. For the 12-month period from January 2014 to January 2015, national home values are expected to rise another 3.4 percent to approximately $175,301, according to the Zillow Home Value Forecast^iv. Large metro areas expected to show the most appreciation over the next year include Riverside (13.3 percent), Orlando (10.3 percent) and Sacramento (9 percent).

National rents rose in January from December, up 0.4 percent to a Zillow Rent Index^v of $1,307. Year-over-year, national rents were up 2.8 percent in January.

	Zillow Home Value Index (ZHVI)			For-Sale Inventory
Metropolitan Areas	January 2014 ZHVI	Month-Month % Change	Year-Year % Change	Median # of Homes for Sale on Zillow, Jan. 2014 (Seasonally Adjusted)	Year-Year % Change in Inventory
United States	$169,600	0.2%	6.3%	1,512,949	11.1%
New York, NY	$369,900	0.6%	6.7%	73,794	9.0%
Los Angeles, CA	$501,300	0.6%	17.3%	19,935	0.3%
Chicago, IL	$178,100	0.5%	9.1%	38,868	-4.5%
Dallas-Fort Worth, TX	$144,400	0.2%	4.6%	21,379	-12.3%
Philadelphia, PA	$193,700	0.2%	3.0%	31,024	5.2%
Houston, TX	$143,700	-0.1%	3.8%	22,630	-13.2%
Washington, DC	$345,500	0.6%	9.0%	13,847	14.6%
Miami-Fort Lauderdale, FL	$187,100	1.4%	18.9%	36,627	7.7%
Atlanta, GA	$137,600	0.9%	16.2%	22,925	10.7%
Boston, MA	$351,600	0.4%	8.0%	13,915	-11.2%
San Francisco, CA	$642,400	0.4%	18.4%	4,188	-1.8%
Detroit, MI	$106,600	1.2%	20.0%	15,520	-1.8%
Riverside, CA	$259,600	1.1%	27.3%	13,607	18.0%
Phoenix, AZ	$187,000	-0.5%	10.2%	20,607	30.5%
Seattle, WA	$310,000	0.3%	9.6%	8,984	12.7%
Minneapolis-St Paul, MN	$197,300	0.0%	7.8%	10,243	15.0%
San Diego, CA	$442,500	0.5%	16.3%	6,820	-12.3%
St. Louis, MO	$131,500	0.0%	-3.3%	17,509	6.9%
Tampa, FL	$135,700	1.0%	16.4%	19,735	15.4%
Baltimore, MD	$237,300	0.4%	5.5%	10,493	9.4%
Denver, CO	$243,900	0.3%	8.0%	7,827	-3.8%
Pittsburgh, PA	$121,000	0.6%	7.2%	11,678	9.0%
Portland, OR	$260,500	0.5%	10.9%	7,067	9.1%
Sacramento, CA	$306,200	0.5%	21.8%	3,929	26.0%
San Antonio, TX	$146,600	-0.4%	2.3%	8,023	-13.6%
Orlando, FL	$155,200	1.4%	19.8%	9,168	22.0%
Cincinnati, OH	$131,900	0.4%	4.1%	9,925	1.3%
Cleveland, OH	$115,700	0.0%	1.4%	11,527	-3.5%
Kansas City, MO	$139,100	-0.4%	2.8%	9,551	-1.4%
Las Vegas, NV	$168,800	0.7%	26.9%	8,412	42.8%
San Jose, CA	$744,800	0.2%	14.5%	1,764	-5.9%
Columbus, OH	$137,300	0.7%	7.7%	8,965	1.8%
Charlotte, NC	$147,600	0.3%	6.0%	10,406	8.4%
Austin, TX	$201,500	0.4%	7.0%	4,330	-12.8%
Virginia Beach, VA	$206,200	0.2%	3.6%	11,184	15.3%

About Zillow:
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®, Agentfolio®, Mortech®, HotPads™ and StreetEasy®. The company is headquartered in Seattle.

Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, StreetEasy and Agentfolio are registered trademarks of Zillow, Inc. HotPads and Digs are trademarks of Zillow, Inc.

ⁱ 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.
ⁱⁱThe 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 are aggregated from public sources by a number of data providers for 930 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are 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/ and www.zillow.com/research/data.
ⁱⁱⁱ Each week, a count of the number of single-family, condominium and cooperative housing units listed for sale on Zillow is taken. The median of these values within a month is calculated as the monthly value. Because inventory can be seasonal, a seasonally adjusted value is reported using a standard STL procedure. This seasonally adjusted series is then smoothed using a three-month rolling average. More information is available at www.zillow.com/research.
^ivThe 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.
^v 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.