higher annual rate of home value appreciation until
now
What a year it has been thus far. The mild winter
evidently commenced the spring market at an earlier date than usual
and there were no signs of it slowing or ending as summer
approached. The situation of low mortgage rates enticed buyers to
flood the market which they did at record paces nationwide. The
climbing prices eventually encouraged sellers to approach the
market to finally bring in more inventory to feed such peak levels
of demand. In addition, home sales have been up by a large margin
and the average days on the market greatly dropped. There truly has
not been a more successful time in the business of real estate for
all parties involved in quite some time; what a road to recovery
2013 has been thus far.
Not since 2004 has there been a higher annual rate of
home value appreciation like there was during the first half of
this year through the completion of the month of June. The most
recent United States Zillow Home Value Index increased to $161,000
come the end of June, which was the closing of the second Quarter
of the year. This marked a 5.8% year-over-year boost and the
strongest annual gain since August of 2006 performed just as well
over August from 2005. In addition, this home value index figure
from Q2 of this year was 2.4% over the number from Q1.
All of the top 30 largest metropolitan areas in the
nation that were studied, including Boston, experienced an annual
appreciation by the end of their Second Quarter. The next year now
is tipped to see yet more successes with a 5% rise in home values
in the country according to the Zillow Home Value Forecast. Out of
the 30 metro areas referred to above, 29 of them will see home
value appreciation over the next twelve months besides New York
City which is set to see roughly 0.8% depreciation largely because
it is a judicial foreclosure State.
Of course, as the year progresses and different buyers
and sellers enter and exit the market just as mortgage rates and
prices gradually continue to rise, these predictions are sure to
change. Zillows Senior Economist Svenja Gudell commented on this
report by stating that, The U.S. housing market as a whole is
currently not experiencing a bubble, but in many places it sure
must feel like one, with some markets experiencing annual home
value appreciation approaching 30 percent. Homeowners are feeling a
sense of whiplash after years of depreciation, but this kind of
market behavior wont last. Investors are starting to pull out of
some markets and regular buyers are coming back, and more inventory
is slowly but surely coming on line, both of which will contribute
to slowdowns in appreciation. Additionally, in some overheated
markets, rapid home value increases coupled with rising mortgage
rates will lead to housing prices and financing costs outpacing
local income growth, which will also contribute to a moderation of
the market. Combined, all of these factors will help the market in
the second half of 2013 and beyond normalize and become much more
steady than it has been in these past six months.
While the past year has been one of the fastest paced
that the industry has ever seen and with brilliant results, falling
back into a state of normalcy where the market is still growing in
a more gradual fashion will be best for both buyers and sellers. No
longer will one party on either side of the table in a transaction
be forced to rush or act in a state of panic because either prices
or mortgage rates are drastically going up or down. No longer will
the reference of a bubble be discussed and finally, the incoming
healthy influx of inventory will only help to balance the abundance
of demand currently engulfing all of these 30 largest metro areas.
All indications point to this summer market now being one of the
most successful in recent years as well, only continuing to further
the great strides forward that the industry has taken since the
start of 2013 and the end of the spring market.
More Information: Zillow