PR Newswire

20 February 2014

More Inventory Slows Home Value Growth in January, Setting Up More of a Buyers’ Market This Spring

– U.S. home values rose 0.2 percent in January from December, the slowest monthly pace in 18 months.

– Inventory rose in 22 of the nation’s 35 largest metro areas covered by Zillow.

– Phoenix, Las Vegas and Sacramento seeing biggest increases in supply of for-sale homes.

– Home values are expected to rise another 3.4 percent over the next 12 months.

National home values rose just 0.2 percent in January from December to a Zillow® Home Value Indexi of $169,600, the smallest monthly increase since May 2012, as more inventory of for-sale homes helped slow previously high rates of appreciation, according to the January Zillow Real Estate Market Reportsii.  Nationwide, while inventory remains tight, the number of homes listed for sale on Zillow was up 11.1 percent annually in Januaryiii on a seasonally adjusted basis, the fifth straight month of rising year-over-year inventory.

Inventory rose year-over-year in 22 of the nation’s 35 largest metro areas covered by Zillow, with the largest inventory gains coming in some of the areas that were hit hardest by the housing recession, including Las Vegas (up 42.8 percent), Phoenix (up 30.5 percent) and Sacramento (up 26 percent). These metros also experienced significant cooling in the pace of home value appreciation in January, as buyers had more homes to choose from and were less apt to engage in the kinds of bidding wars that helped drive prices up so quickly last year.

“Last year, tight inventory contributed to very rapid home value appreciation.  Now, more inventory is helping to moderate home value increases in many areas. This increased supply is coming from many sources, as more sellers are free to list their homes after being released from negative equity, builders continue to ramp up construction and many homeowners decide to list their homes and capitalize on recent gains,” said Zillow Chief Economist Dr. Stan Humphries. “As the market shakes off a long winter and gears up for the spring season, we should see buyers gaining a bit more leverage this year than they’ve had in the past, with more choice and less competition. This slightly more balanced market is another step on the road back to normal, and will help offset the impact of rising mortgage rates and more expensive homes for buyers.”

Year-over-year, U.S. home values rose 6.3 percent in January, down from peak gains of 7.1 percent in August 2013. For the 12-month period from January 2014 to January 2015, national home values are expected to rise another 3.4 percent to approximately $175,301, according to the Zillow Home Value Forecastiv. Large metro areas expected to show the most appreciation over the next year include Riverside (13.3 percent), Orlando (10.3 percent) and Sacramento (9 percent).

National rents rose in January from December, up 0.4 percent to a Zillow Rent Indexv of $1,307. Year-over-year, national rents were up 2.8 percent in January.

Zillow Home Value Index (ZHVI) For-Sale Inventory
Metropolitan Areas January 2014 ZHVI Month-Month % Change Year-Year % Change Median # of Homes for Sale on Zillow, Jan. 2014 (Seasonally Adjusted) Year-Year % Change in Inventory
United States $169,600 0.2% 6.3% 1,512,949 11.1%
New York, NY $369,900 0.6% 6.7% 73,794 9.0%
Los Angeles, CA $501,300 0.6% 17.3% 19,935 0.3%
Chicago, IL $178,100 0.5% 9.1% 38,868 -4.5%
Dallas-Fort Worth, TX $144,400 0.2% 4.6% 21,379 -12.3%
Philadelphia, PA $193,700 0.2% 3.0% 31,024 5.2%
Houston, TX $143,700 -0.1% 3.8% 22,630 -13.2%
Washington, DC $345,500 0.6% 9.0% 13,847 14.6%
Miami-Fort Lauderdale, FL $187,100 1.4% 18.9% 36,627 7.7%
Atlanta, GA $137,600 0.9% 16.2% 22,925 10.7%
Boston, MA $351,600 0.4% 8.0% 13,915 -11.2%
San Francisco, CA $642,400 0.4% 18.4% 4,188 -1.8%
Detroit, MI $106,600 1.2% 20.0% 15,520 -1.8%
Riverside, CA $259,600 1.1% 27.3% 13,607 18.0%
Phoenix, AZ $187,000 -0.5% 10.2% 20,607 30.5%
Seattle, WA $310,000 0.3% 9.6% 8,984 12.7%
Minneapolis-St Paul, MN $197,300 0.0% 7.8% 10,243 15.0%
San Diego, CA $442,500 0.5% 16.3% 6,820 -12.3%
St. Louis, MO $131,500 0.0% -3.3% 17,509 6.9%
Tampa, FL $135,700 1.0% 16.4% 19,735 15.4%
Baltimore, MD $237,300 0.4% 5.5% 10,493 9.4%
Denver, CO $243,900 0.3% 8.0% 7,827 -3.8%
Pittsburgh, PA $121,000 0.6% 7.2% 11,678 9.0%
Portland, OR $260,500 0.5% 10.9% 7,067 9.1%
Sacramento, CA $306,200 0.5% 21.8% 3,929 26.0%
San Antonio, TX $146,600 -0.4% 2.3% 8,023 -13.6%
Orlando, FL $155,200 1.4% 19.8% 9,168 22.0%
Cincinnati, OH $131,900 0.4% 4.1% 9,925 1.3%
Cleveland, OH $115,700 0.0% 1.4% 11,527 -3.5%
Kansas City, MO $139,100 -0.4% 2.8% 9,551 -1.4%
Las Vegas, NV $168,800 0.7% 26.9% 8,412 42.8%
San Jose, CA $744,800 0.2% 14.5% 1,764 -5.9%
Columbus, OH $137,300 0.7% 7.7% 8,965 1.8%
Charlotte, NC $147,600 0.3% 6.0% 10,406 8.4%
Austin, TX $201,500 0.4% 7.0% 4,330 -12.8%
Virginia Beach, VA $206,200 0.2% 3.6% 11,184 15.3%