Home values are setting new records in about half of the largest metros in the United States and the national median home value is now $4,100 more than it was in April 2007, just before the market crashed.
Home values in Denver, Dallas and San Jose have appreciated most beyond the previous record highs set at the peak of the housing bubble, according to the latest real estate market report from property firm Zillow.
Home prices in Denver are almost 60% more now than during the bubble, increasing from a median home value of $235,900 in April 2006 to a current median home value of $371,100, the data shows.
When the housing market crashed, home values plummeted and it has taken about 10 years for home values to reach new record highs, the report explains and now a strong labour market and steady income growth have pushed up home values in the nation’s hottest markets more quickly than in others.
Among the 35 largest housing markets 15 have higher median home values than ever before and an abundance of well-paying jobs in Portland, San Francisco and Seattle has quickly driven up home values as job seekers flood these markets looking for new opportunities.
Indeed, in Portland, the median home value is about 26% higher now than during peak bubble years, and about 20% higher in San Francisco and Seattle.
Additionally, more than 48% of individual homes nationwide are currently worth more than they were prior to the onset of the recession. But it depends on location. For example, in Denver 99.5% of homes are worth more now than during the peak of the housing bubble, but in Las Vegas less than 1% of homes are more valuable.
‘Home values are high but affordability, while suffering a bit lately is still okay, largely because of very low mortgage interest rates helping to keep monthly mortgage payments in check,’ said Zillow chief economist Svenja Gudell.
‘The more pressing issue is abnormally low inventory, which is translating into an extremely competitive environment for home shoppers. Bidding wars and homes selling for over asking price have been common themes in many markets this summer, and continued competition in the face of limited supply will only continue to push home values up going forward,’ she explained.
‘Home shoppers that were hoping to buy this summer but haven’t yet found their dream home may have better luck once September and October roll around, when we can expect to see more homes coming online and less competition,’ she added.
The data also shows that the median home value across the US increased by 6.8% over the past year to $200,700, which is $4,100 more than in April 2007 when home values were at their previous peak.
Seattle, Dallas and Tampa in Florida reported the greatest year on year home value appreciation between July 2016 and July 2017 among the 35 largest metros. In Seattle, home values rose almost 13% in 12 months to a median home value of $450,900.
Median rent across the nation have increased by 1.6% since July 2016, the fastest pace of appreciation since December 2016, to a median of $1,427 per month.
Seattle, Sacramento and Los Angeles reported the greatest rent growth over the past year, up by 5% in Seattle and Sacramento and 4% in Los Angeles.
The report points out that one of the major issue for buyers has been low inventory. There are 13% fewer homes on the market now than a year ago, the greatest drop in inventory since June 2013. In San Jose there are 51% fewer homes for sale now than last July and 36% fewer in San Diego.