Home Value Appreciation Slowed in Most Major Markets

Seattle and San Jose saw the biggest declines in appreciation over the year, but Indianapolis and Atlanta accelerated.

- Home value appreciation was slower this December than it was a year ago in 19 of the 35 largest housing markets.

- The typical U.S. home is worth $223,900, 7.6 percent more than it was a year ago.

- The median rent increased 1.4 percent over the past year, the biggest annual increase since June 2018.

- Inventory declined 0.4 percent after three straight months of annual increases.

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Jan 24, 2019, 08:00 ET

SEATTLE, Jan. 24, 2019 /PRNewswire/ -- Annual home value growth slowed in more than half of the nation's largest housing markets since this time last year, according to the December Zillow® Real Estate Market Reportⁱ. Seattle and San Jose, Calif., saw the biggest declines in appreciation over the past year.

In December 2017, home values in Seattle were growing at a 12.4 percent annual pace. They continued to appreciate at a double-digit pace through early 2018, but slowed to 5.0 percent in the seven months leading into December. San Jose saw a similarly steep drop in appreciation – from 16.8 percent in December 2017 to 9.9 percent in December 2018.

The median U.S. home value is $223,900, up 7.6 percent from December 2017, when national home value appreciation was 7.4 percent. Home value appreciation across much of the country has been fairly steady over the past year.

In several more affordable Southern markets, home value appreciation accelerated over the past year. In Atlanta, for example, appreciation increased from 8.1 percent at the end of 2017 to 13.2 percent in December 2018.

Even as appreciation slowed in 19 of the nation's 35 largest housing markets, national home value growth is faster than it was when the market was coming out of the Great Recession. The fastest home values grew in the earliest years of the recovery was 7 percent in early 2014.

"Looking at the nation as a whole, housing appreciation seems stabilized at an arguably aggressive pace," said Skylar Olsen, Zillow Director of Economic Research and Outreach. "The exceptions to the rule are the metros that saw the fastest appreciation over the past few years, where home values far outpaced incomes. Employment growth continues, but that kind of extreme home value growth isn't sustainable, and home buyers' willingness and ability to outbid each other is falling back fast. We expect continued slowdowns in those expensive coastal markets. A three-month trend in increasing inventory ended, telling buyers that the pendulum hasn't fully swung in their favor for this year's home shopping season."

The median rent increased 1.4 percent from the previous December to a Zillow Rent Index of $1,460. This was the biggest annual increase in rents since June 2018. Orlando rents saw the biggest jump, up 6.4 percent over the past year to $1,496. Rents fell 1.3 percent in Portland, Oregon.

Inventory fell slightly over the past year, down 0.4 percent since December 2017. This came after three consecutive months of gains in the number of homes for sale, suggesting that national sustained inventory growth is not here yet. Still, several major markets that were starved for homes for sale are seeing big gains, led by San Jose (up 47.6 percent), Seattle (up 32.9 percent) and San Diego (up 32.2 percent).

Mortgage rates on Zillow ended December at 4.30 percent, which was also the lowest rate of the monthⁱⁱ. Rates were highest at the beginning of the monthⁱⁱⁱ, at 4.56 percent. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

Metropolitan Area	Zillow Home Value Index, December 2018	ZHVI Year-over-Year Change	Zillow Rent Index, December 2018	ZRI Year-over-Year Change	Inventory Year-over-Year Change
United States	$223,900	7.6%	$1,460	1.4%	-0.4%
New York, NY	$437,300	5.2%	$2,408	-0.3%	4.5%
Los Angeles-Long Beach-Anaheim, CA	$650,200	3.9%	$2,804	2.4%	28.9%
Chicago, IL	$224,200	4.5%	$1,672	1.0%	1.2%
Dallas-Fort Worth, TX	$240,200	11.3%	$1,626	1.6%	11.9%
Philadelphia, PA	$231,800	3.6%	$1,593	0.7%	-10.0%
Houston, TX	$204,300	6.8%	$1,572	1.5%	3.5%
Washington, DC	$404,100	3.5%	$2,157	0.5%	-18.9%
Miami-Fort Lauderdale, FL	$282,700	7.9%	$1,894	1.9%	4.1%
Atlanta, GA	$216,600	13.2%	$1,426	2.6%	-2.4%
Boston, MA	$463,600	6.0%	$2,385	0.4%	10.3%
San Francisco, CA	$962,300	7.0%	$3,433	0.7%	28.1%
Detroit, MI	$159,400	9.0%	$1,218	1.6%	7.9%
Riverside, CA	$365,400	6.0%	$1,951	5.3%	15.0%
Phoenix, AZ	$263,200	7.6%	N/A	N/A	-7.5%
Seattle, WA	$488,400	5.0%	$2,213	0.1%	32.9%
Minneapolis-St Paul, MN	$266,000	6.1%	$1,678	2.9%	-1.7%
San Diego, CA	$592,700	4.8%	$2,606	2.5%	32.2%
St. Louis, MO	$166,500	6.3%	$1,149	0.4%	-7.1%
Tampa, FL	$212,900	10.1%	$1,417	4.3%	3.5%
Baltimore, MD	$267,600	4.0%	$1,747	0.5%	-12.3%
Denver, CO	$403,600	5.6%	$2,090	2.4%	18.3%
Pittsburgh, PA	$143,800	6.5%	$1,096	4.1%	-11.9%
Portland, OR	$395,700	4.9%	$1,857	-1.3%	15.4%
Charlotte, NC	$205,100	11.2%	$1,323	2.2%	-2.3%
Sacramento, CA	$406,900	4.8%	$1,885	2.4%	16.0%
San Antonio, TX	$191,800	7.2%	$1,351	0.5%	6.9%
Orlando, FL	$235,300	9.6%	$1,496	6.4%	0.4%
Cincinnati, OH	$167,700	8.1%	$1,296	1.4%	-1.0%
Cleveland, OH	$145,000	6.5%	$1,154	0.4%	N/A
Kansas City, MO	$190,500	10.0%	$1,286	1.0%	-14.2%
Las Vegas, NV	$278,000	13.0%	N/A	N/A	-9.4%
Columbus, OH	$188,400	7.2%	$1,350	2.2%	0.4%
Indianapolis, IN	$162,700	12.8%	$1,222	0.7%	N/A
San Jose, CA	$1,253,500	9.9%	$3,536	0.7%	47.6%
Austin, TX	$306,600	7.0%	$1,694	0.5%	3.8%

Zillow
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 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. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark 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 are aggregated from public sources by a number of data providers for 928 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/research/data.
ⁱⁱ Rates also hit 4.30 percent on December 27
ⁱⁱⁱ December 3, 2018

SOURCE Zillow