SEATTLE, Nov. 20, 2020 /PRNewswire/ -- A market defined by
intense demand for relatively tight supply pushed month-over-month
and quarterly home value growth to levels not seen since 2005,
according to Zillow's® latest Real Estate Market
Report[1]. Rent appreciation, meanwhile, is
steaming ahead in many Midwest and Sun Belt cities while declining
in major coastal metros.
The high-demand market also meant more homes changed hands than
at any time in the past 15 years. October's seasonally adjusted
annualized rate (SAAR) of home sales was 6.85 million, according to
the National Association of Realtors, which was the strongest pace
since 2005. Zillow economists expect this rate to remain elevated
for the coming year. It is forecasted to average 6.42 million
through September 2021, which would
mark the strongest year for home sales since 2006.
Home value growth accelerated from 0.9% month over month growth
in September to 1% in October, the fastest rate in 15 years. That
growth has only been higher -- barely -- on four occasions in the
24-year history of the Zillow Home Value Index: in June, July,
August, and September of 2005. Typical home values now stand at
$262,604.
"The red-hot housing market of this summer and fall is now
clearly reflected in soaring home value appreciation," said
Zillow senior economist Jeff Tucker.
"We haven't seen such steep, short-term appreciation since the
summer of 2005, but this time it is driven by buyers with strong
credit and incomes securing affordable fixed-rate mortgages, unlike
the wave of poorly-vetted, exotic mortgages that financed the last
boom. The simple fact is that millions of well-qualified
Millennials are seriously shopping for houses and they are
competing for a shortfall of homes for sale."
In September, quarterly growth for home values reached 2.3%,
then the largest increase since the summer of 2013, when the U.S.
was recovering from the Great Recession. In October, quarterly
growth reached 2.6%, the highest since November 2005. Home values rose 6.6% year over
year last October the annual growth rate was 3.9%.
No major metro area witnessed a drop in home values from
September to October. Monthly value increases ranged from 0.6% in
Richmond, Va., to 1.9% in
San Jose. Growth accelerated in 34
of the top 50 markets, was flat in 13, and decelerated in 3:
Las Vegas, Los Angeles, and Riverside.
Strength in the for-sale market has coincided with continuing
weakness in the rental market. Rent prices dropped by 0.1% from
September to October to $1,751.
Nationwide, typical rents are up just under 0.9% compared to
October 2019. Annual growth was 3.4%
in October 2019.
Yearly rent declines deepened in October in former bastions of
growth, including New York
(-8.1%), San Francisco (-6.9%),
Boston (-5%) and San Jose (-4.2%). These cities also exhibited
significant month-over-month declines in rent, along with
Seattle (-1.7%), Chicago (-0.9%), and Washington, DC (-0.9%).
Momentum in the rental market still favors Sun Belt and
Midwestern cities. Among the 50 largest U.S. metros, leaders in
rent growth since September were Providence, Rhode Island (2.2%), Phoenix (1.6%), Las
Vegas (1.4%) and Riverside
(1.3%). Year over year growth has been highest in Memphis (9.5%), Phoenix (8.2%), Riverside (8.1%), and Providence (7.5%).
Market stats from the week ending Nov.
14 show pending sales slowing late in the season, dropping
3.6% week over week, but still up a substantial 14.5% compared to
2019. Although new listings are coming online faster than they
usually do in November, the decline of available inventory that
began in early June continued, dropping 1.5% since the previous
week to 33.3% below last year's stock.
Mortgage rates listed by third-party lenders on Zillow started
the month at 2.94%, rose to 3.00% on Oct.
21, then fell to 2.76% on Oct.
27 before finishing out the month at 2.79%. Zillow's
real-time mortgage rates are based on thousands of custom mortgage
quotes submitted daily to anonymous borrowers on the Zillow Group
Mortgages site by third-party lenders and reflect recent changes in
the market[2].
Metropolitan
Area*
|
Zillow Home
Value Index
(ZHVI), October
2020
|
ZHVI - YoY
Change,
October 2020
|
Total For-Sale
Listings - YoY
Change,
Week Ending
Nov. 14
|
Zillow
Observed
Rent Index
(ZORI),
October 2020
|
ZORI - YoY
Change,
October 2020
|
United
States
|
$262,604
|
6.6%
|
-33.3%
|
$1,751
|
0.9%
|
New York/Newark,
NY/NJ
|
$505,569
|
4.7%
|
-12.6%
|
$2,600
|
-8.1%
|
Los Angeles,
CA
|
$726,379
|
7.8%
|
-17.5%
|
$2,602
|
0.3%
|
Chicago,
IL
|
$255,532
|
4.3%
|
-25.7%
|
$1,685
|
-1.7%
|
Dallas-Fort Worth,
TX
|
$271,831
|
5.5%
|
-37.3%
|
$1,578
|
1.7%
|
Philadelphia,
PA
|
$269,695
|
7.5%
|
-38.2%
|
$1,635
|
1.7%
|
Houston,
TX
|
$229,613
|
4.4%
|
-29.2%
|
$1,505
|
0.7%
|
Washington,
DC
|
$459,656
|
6.4%
|
-30.0%
|
$2,068
|
-2.3%
|
Miami-Fort
Lauderdale, FL
|
$312,574
|
5.5%
|
-13.5%
|
$1,938
|
1.7%
|
Atlanta,
GA
|
$255,109
|
7.1%
|
-31.7%
|
$1,617
|
5.1%
|
Boston, MA
|
$525,223
|
7.0%
|
-25.1%
|
$2,313
|
-5.0%
|
San Francisco,
CA
|
$1,126,793
|
5.0%
|
7.4%
|
$3,039
|
-6.9%
|
Detroit,
MI
|
$195,270
|
7.1%
|
-41.3%
|
$1,320
|
4.5%
|
Riverside,
CA
|
$411,728
|
8.0%
|
-46.5%
|
$2,212
|
8.1%
|
Phoenix,
AZ
|
$315,045
|
12.9%
|
-22.8%
|
$1,550
|
8.2%
|
Seattle,
WA
|
$567,205
|
12.4%
|
-20.4%
|
$1,916
|
-1.4%
|
Minneapolis-St. Paul,
MN
|
$310,357
|
6.8%
|
-26.7%
|
$1,557
|
1.6%
|
San Diego,
CA
|
$649,474
|
9.5%
|
-33.0%
|
$2,369
|
3.4%
|
St. Louis,
MO
|
$190,720
|
7.0%
|
-33.9%
|
$1,171
|
4.3%
|
Tampa, FL
|
$240,308
|
9.1%
|
-33.7%
|
$1,585
|
5.9%
|
Baltimore,
MD
|
$311,464
|
5.4%
|
-46.3%
|
$1,678
|
2.1%
|
Denver, CO
|
$468,128
|
6.4%
|
-35.1%
|
$1,739
|
0.6%
|
Pittsburgh,
PA
|
$174,771
|
7.9%
|
-32.1%
|
$1,194
|
2.0%
|
Portland,
OR
|
$442,464
|
7.4%
|
-34.0%
|
$1,681
|
2.2%
|
Charlotte,
NC
|
$259,012
|
9.0%
|
-44.1%
|
$1,522
|
3.2%
|
Sacramento,
CA
|
$458,805
|
8.8%
|
-37.2%
|
$1,921
|
6.3%
|
San Antonio,
TX
|
$223,830
|
4.3%
|
-27.8%
|
$1,362
|
1.3%
|
Orlando,
FL
|
$268,806
|
6.2%
|
-18.0%
|
$1,618
|
1.5%
|
Cincinnati,
OH
|
$203,768
|
8.8%
|
-33.1%
|
$1,306
|
4.8%
|
Cleveland,
OH
|
$168,994
|
9.2%
|
-40.0%
|
$1,143
|
3.7%
|
Kansas City,
MO
|
$220,301
|
8.1%
|
-41.3%
|
$1,230
|
5.7%
|
Las Vegas,
NV
|
$305,073
|
6.9%
|
-19.8%
|
$1,499
|
5.9%
|
Columbus,
OH
|
$225,835
|
8.2%
|
-39.0%
|
$1,382
|
4.6%
|
Indianapolis,
IN
|
$200,366
|
8.9%
|
-38.9%
|
$1,327
|
7.0%
|
San Jose,
CA
|
$1,236,298
|
13.4%
|
-0.1%
|
$3,017
|
-4.2%
|
Austin, TX
|
$366,297
|
9.1%
|
-39.8%
|
$1,529
|
-0.7%
|
Virginia Beach,
VA
|
$259,731
|
6.0%
|
-33.4%
|
$1,418
|
5.0%
|
Nashville,
TN
|
$297,996
|
6.9%
|
-26.2%
|
$1,599
|
2.2%
|
Providence,
RI
|
$342,548
|
8.4%
|
-36.9%
|
$1,698
|
7.5%
|
Milwaukee,
WI
|
$202,012
|
9.2%
|
13.3%
|
$1,159
|
3.4%
|
Jacksonville,
FL
|
$246,484
|
6.2%
|
-40.1%
|
$1,410
|
5.3%
|
Memphis,
TN
|
$167,904
|
9.7%
|
-44.3%
|
$1,357
|
9.5%
|
Oklahoma City,
OK
|
$171,213
|
6.6%
|
-41.8%
|
$1,106
|
3.3%
|
Louisville,
KY
|
$192,122
|
7.7%
|
-39.2%
|
$1,040
|
5.2%
|
Hartford,
CT
|
$250,566
|
6.5%
|
-41.0%
|
$1,438
|
5.4%
|
Richmond,
VA
|
$261,415
|
5.2%
|
-41.2%
|
$1,344
|
3.4%
|
New Orleans,
LA
|
$217,016
|
6.9%
|
-40.3%
|
$1,420
|
1.6%
|
Buffalo,
NY
|
$187,090
|
8.6%
|
-44.3%
|
$1,161
|
5.0%
|
Raleigh,
NC
|
$299,764
|
5.6%
|
-30.5%
|
$1,528
|
2.1%
|
Birmingham,
AL
|
$184,012
|
8.5%
|
-46.4%
|
$1,123
|
4.3%
|
Salt Lake City,
UT
|
$418,763
|
9.9%
|
|
$1,400
|
3.2%
|
*Table ordered by
market size
|
About Zillow
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ZG).
[1] 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. Methodologies and all current
monthly data at the national, state, metro, city, ZIP code and
neighborhood level can be accessed at
www.zillow.com/research/data.
[2] Zillow Group Marketplace, Inc. is
a licensed mortgage broker, NMLS #1303160.
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SOURCE Zillow