Home value appreciation is slowing down in two-thirds of the largest housing markets in the US, according to the Real Estate Market Report released by Zillow for July.
Seattle, Tampa, Fla., Sacramento, Calif., and Portland, Ore., recorded the greatest home-value growth slowdowns in July.
After leading the US in home-value growth in the year-ago period, Seattle reported the greatest slowdown over the past year and is now only the 12th fastest-appreciating housing market. The city’s home values had a 14% annual appreciation rate at this time last year, but they have since slowed down to 9%.
Despite the local slowdowns, national home value growth has not slowed yet, with US home values rising 8% in the past year. The median home value in the US is $218,000, the highest value ever reported. However, Zillow forecasts the annual appreciation rate to drop to 6.8% over the next 12 months.
“The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,” Zillow Senior Economist Aaron Terrazas said. “But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market. And in many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money. But it’s clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift.”
Although most of the largest markets recorded slowdowns in home-value growth, the current annual appreciation rate is still higher than historical norms in all but four of the markets analyzed. For example, while home-value growth slowed significantly in Tampa, values still increased 10.5% in the past year. Meanwhile, the historic average rate of appreciation is just over 5%.
Source: Mortgage Professional America, Francis Monfort, 8-27-18