Zillow's second quarter Real Estate Market Report, released today, show home values increased 2.4% from the first quarter of 2013 to quarter two of 2013 to $161,100. ? This quarter marks the biggest yearly gain since Aug 2006 and largest quarterly gain since quarter 4 of 2005. On an annual basis, the Zillow Home Value Index (ZHVI) rose 5.8% from June 2012 levels.
Monthly appreciation remains strong with countrywide home values growing by 0.9% from May. Not only did the speed of home worth appreciation quicken in the 2nd quarter, but the recovery also fully took hold across the nation. Markets in some areas of the Northeast, Midwest and Southeastern US, such as Atlanta, Chicago and St. Louis, that had previously been slow to turn the corner started to appreciate, which helped galvanize the general national market. All the top 30 largest metro areas covered experienced annual appreciation in home values as of the end of Q2, and all have hit their bottom.
According to the Zillow Home Worth Forecast (ZHVF), we expect national home values to increase 5% over the next year (June 2013 to June 2014). Of the 257 markets covered by the Zillow Home Worth Outlook, 241 markets are anticipated to see increases in home values over the next year, with the biggest increases anticipated in the Sacramento metro (18.9%) and the Riverbank metro (16.6%). Many California markets follow closely at the head of the list of markets predicted to see the highest home price appreciation over the following year. According to the ZHVF, 234 markets (91%) have recently hit a bottom in home values, and another 13 are anticipated to hit a bottom by June 2014.
Home Values
The Zillow Real Estate Market Reports cover 389 urban and micropolitan areas (metros) of which 259 showed quarterly home price appreciation. Three metros stayed flat, while 127 metros show home values losses. Roughly 72% of the metros covered by the Real Estate Market Reports posted annual increases in home values â€" a sign of the nation's housing recovery continuing to take hold. Among the largest metros, Sacramento showed the largest yearly increase with home values rising 29.5% from the second quarter of 2012 to the second quarter of 2013. We do believe that appreciation rates will return to more viable levels over the next year or 2. Overall, countrywide home values are back to Aug 2004 levels, down 17.2% since their peak in May 2007.
Rents
The Zillow Lease Index (ZRI) covers 496 metro areas, and 57% of those metros reported annual increases in hires in June. As a point of comparison, almost 72% of the metro areas covered by the ZHVI experienced yearly home price increases. Nationally, rents increased 1.6% in June from year-ago levels, implying a slowing. This is a serious yearly decline in the rental appreciation rate from its pinnacle appreciation of 6.2% nationally in Sep 2012.
This development combined with rising home values is another contributor to backers exiting some markets as they had often acquired for-sale inventory to convert them to for-rent properties. Markets that continue to see very strong year-over-year hire increases include Cincinnati (10.5%), Denver (5.5%) and Boston (4.3%).
Foreclosures
The rate of homes foreclosed continued to decline in June with 4.96 out of each 10,000 houses in the country being liquidated through foreclosure. Nationally, foreclosure resales remain low, making up 9.53% of all sales in June, down 3.6 % points from the 2nd quarter of 2012, underlining the limited inventory of foreclosure resales. For-sale inventory levels remain constrained, with many metro areas across the nation having fewer for-sale lists available in June compared with last year, though restraints are starting to ease. The lack of foreclosure resales and standard for-sale inventory in several markets is contributing to home price appreciation. In the second 1/2 the year we are expecting continued easing with speculators beginning to slowly exit markets. As home values continue to climb.
Outlook
With the housing recovery in effect, many house owners are feeling a feeling of whiplash after years of depreciation, but this type of market behaviour will not last. Stockholders are beginning to pull out of some markets â€" as home values are climbing higher â€" and regular customers are coming back, now that they can be competitive again. Although, some consumers are beginning to feel the cut in purchasing power due to higher mortgage rates. More for-sale inventory is slowly coming on line, as houses are liberated from negative equity and more house owners are deciding to sell. Both of these developments will make contributions to slowdowns in appreciation toward more viable rates.
The US ?housing market? In total is presently not experiencing a bubble, but in many places it may feel a bit like one, with some markets (Sacramento, Las Vegas, San Francisco) experiencing annual home price appreciation approaching 30%. In some overheated markets, fast home value increases joined with rising mortgage rates will lead directly to housing costs and financing costs outpacing local income growth, which will also contribute to a moderation of the market.
Monthly appreciation remains strong with countrywide home values growing by 0.9% from May. Not only did the speed of home worth appreciation quicken in the 2nd quarter, but the recovery also fully took hold across the nation. Markets in some areas of the Northeast, Midwest and Southeastern US, such as Atlanta, Chicago and St. Louis, that had previously been slow to turn the corner started to appreciate, which helped galvanize the general national market. All the top 30 largest metro areas covered experienced annual appreciation in home values as of the end of Q2, and all have hit their bottom.
According to the Zillow Home Worth Forecast (ZHVF), we expect national home values to increase 5% over the next year (June 2013 to June 2014). Of the 257 markets covered by the Zillow Home Worth Outlook, 241 markets are anticipated to see increases in home values over the next year, with the biggest increases anticipated in the Sacramento metro (18.9%) and the Riverbank metro (16.6%). Many California markets follow closely at the head of the list of markets predicted to see the highest home price appreciation over the following year. According to the ZHVF, 234 markets (91%) have recently hit a bottom in home values, and another 13 are anticipated to hit a bottom by June 2014.
Home Values
The Zillow Real Estate Market Reports cover 389 urban and micropolitan areas (metros) of which 259 showed quarterly home price appreciation. Three metros stayed flat, while 127 metros show home values losses. Roughly 72% of the metros covered by the Real Estate Market Reports posted annual increases in home values â€" a sign of the nation's housing recovery continuing to take hold. Among the largest metros, Sacramento showed the largest yearly increase with home values rising 29.5% from the second quarter of 2012 to the second quarter of 2013. We do believe that appreciation rates will return to more viable levels over the next year or 2. Overall, countrywide home values are back to Aug 2004 levels, down 17.2% since their peak in May 2007.
Rents
The Zillow Lease Index (ZRI) covers 496 metro areas, and 57% of those metros reported annual increases in hires in June. As a point of comparison, almost 72% of the metro areas covered by the ZHVI experienced yearly home price increases. Nationally, rents increased 1.6% in June from year-ago levels, implying a slowing. This is a serious yearly decline in the rental appreciation rate from its pinnacle appreciation of 6.2% nationally in Sep 2012.
This development combined with rising home values is another contributor to backers exiting some markets as they had often acquired for-sale inventory to convert them to for-rent properties. Markets that continue to see very strong year-over-year hire increases include Cincinnati (10.5%), Denver (5.5%) and Boston (4.3%).
Foreclosures
The rate of homes foreclosed continued to decline in June with 4.96 out of each 10,000 houses in the country being liquidated through foreclosure. Nationally, foreclosure resales remain low, making up 9.53% of all sales in June, down 3.6 % points from the 2nd quarter of 2012, underlining the limited inventory of foreclosure resales. For-sale inventory levels remain constrained, with many metro areas across the nation having fewer for-sale lists available in June compared with last year, though restraints are starting to ease. The lack of foreclosure resales and standard for-sale inventory in several markets is contributing to home price appreciation. In the second 1/2 the year we are expecting continued easing with speculators beginning to slowly exit markets. As home values continue to climb.
Outlook
With the housing recovery in effect, many house owners are feeling a feeling of whiplash after years of depreciation, but this type of market behaviour will not last. Stockholders are beginning to pull out of some markets â€" as home values are climbing higher â€" and regular customers are coming back, now that they can be competitive again. Although, some consumers are beginning to feel the cut in purchasing power due to higher mortgage rates. More for-sale inventory is slowly coming on line, as houses are liberated from negative equity and more house owners are deciding to sell. Both of these developments will make contributions to slowdowns in appreciation toward more viable rates.
The US ?housing market? In total is presently not experiencing a bubble, but in many places it may feel a bit like one, with some markets (Sacramento, Las Vegas, San Francisco) experiencing annual home price appreciation approaching 30%. In some overheated markets, fast home value increases joined with rising mortgage rates will lead directly to housing costs and financing costs outpacing local income growth, which will also contribute to a moderation of the market.
About the Author:
Marco Santarelli is an investor, author and founder of Norada Real Estate Investments â€" a nationwide real estate investment firm providing turnkey investment property in growth markets around the United States. "State of the U.S. Housing Market" was originally published on the Real Estate Investing Blog.
No comments:
Post a Comment