Median home values in more than half of largest US housing markets reaching peaks
Median residential property values are reaching new peaks in more than half of the largest housing markets in the United States, new research shows.
But a closer look at which homes are regaining value reveals an uneven recovery in the biggest markets, according to the August property market report from real estate data firm Zillow.
In 24 of the nation’s largest 35 markets, the homes in the bottom third of the market are least likely to have recovered the value lost when the housing bubble burst.
Detroit has seen one of the least balanced recoveries following the recession. Nearly two thirds of the most expensive homes in Detroit have regained the value lost when the market collapsed.
The typical top tier home value in Detroit is $284,800, higher than it was during the housing bubble. In comparison, homes in the bottom third have only regained 33.7% of their lost value and are now worth a median of $53,000. Only 10.6% of these homes have fully returned to their peak values.
As homes are often the most expensive asset someone owns, the recovery contributes to the growing wealth gap across the country. Household incomes show a similar pattern of inequality, according to newly released Census data. The median household income across the United States increased in 2016, but those in the top 205 of earners took home more than half of the overall income.
‘The housing market as a whole is moving at a steady clip, with high demand and low inventory combining to maintain strong home value appreciation,’ said Zillow chief economist Svenja Gudell.
‘Most new construction has been at the higher end of the market, so demand for the limited supply of entry level homes is pushing up their values, but these homes also lost more value when the bubble burst,’ she explained.
‘Many of these home owners are still waiting to see their homes come back to where they were about 10 years ago. Even as headline numbers show an overall recovery, there are still thousands of Americans struggling to bounce back from the housing bust,’ she added.
The report also shows that the median home value rose 6.9% over the last year to $201,900. Seattle is the only major market where home values rose at a double digit annual pace, up 12.4% since August 2016 to a median home value of $453,100.
Data from the report reveals that annual rent appreciation grew for the fourth consecutive month, with rents increasing 1.9% year on year.
Zillow points out that limited inventory leaves few options for buyers. Nationally there were 12.6% fewer homes available in August 2017 than there were in August 2016. San Jose and San Diego saw the biggest annual declines in inventory, down 59.4% and 37.2% respectively.