Property price growth is slowing in almost two thirds of the largest housing markets in the United States, with Seattle, Tampa, Sacramento and Portland seeing the biggest slowdowns, the latest market analysis show.
Seattle, which led the nation’s in home value growth a year ago, is now the 12th fastest appreciating housing market and reported the greatest slowdown over the past year, according the July market report from real estate data firm Zillow.
It points out that at this time last year, home values in Seattle were appreciating at more than 14% year on year but have now slowed to a 9% appreciation rate.
Overall, prices across the US have increased by 8% in the past year, just 0.7% faster than the year before. Currently the median home value is $218,000, the highest value ever reported.
While national home value growth hasn’t slowed yet, Zillow forecasts the annual appreciation rate to drop to 6.8% over the next 12 months.
The analysis report also points out that while price growth is slowing in the majority of the largest markets, the current annual appreciation rate is still higher than historical norms in all but four of the markets analysed.
For example, in Tampa, where home value growth has slowed significantly over the past year, home values rose over 10.5% in the past year, while the historic average rate of appreciation is just over 5%. The historic average annual rate of appreciation in the US is 3.7%.
‘The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,’ said Zillow senior economist Aaron Terrazas.
‘But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market. And in many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money. But it’s clear that the winds that have boosted sellers over the past few years are ever so slightly starting to shift,’ he added.
The research also reveals that the rental market is also showing signs of a slowdown. Median rent across the nation rose just 0.5% over the past year to $1,440, down from 1.6% growth a year ago.
Among the 35 largest housing markets, 21 reported slower rent appreciation in July compared to a year ago, with Seattle, Portland and Kansas City leading the slowdown. Rental prices rose the most over the past year in Riverside, California, up 4.6% since last July and in Las Vegas by 3.2% over the same period.
Zillow also explains that the number of homes for sale has been declining annually across the country for 42 straight months, although the pace of the decline is slowing. Home buyers will have about 4% fewer homes on the market to choose from than a year ago, the smallest annual decline in 17 months.
Columbus, Ohio, Atlanta and Pittsburgh reported the greatest drop in inventory over the past year. In Columbus and Atlanta, buyers will have about 14% fewer homes to choose from than a year ago, and about 13% fewer in Pittsburgh.
