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Rate of Home Value Appreciation Slows Nationwide in Q1, But Pockets of Volatility Remain
Stan Humphries / Zillow / April 24, 2013
Zillow’s first quarter Real Estate Market Reports, released today, show home values increased 0.5% from the fourth quarter of 2012 to the first quarter of 2013 to $157,600 (Figure 1). This quarter marks five consecutive quarters of national home value appreciation. On an annual basis, the Zillow Home Value Index (ZHVI) rose 5.1% from March 2012 levels (Figure 2). While home values are still experiencing above normal annual home value appreciation we are seeing signs of deceleration. Monthly appreciation, albeit positive, has been continuously getting smaller, and national home values grew by only 0.1% for the past two months. This does not come as a surprise as appreciation rates have been unsustainable, especially in some of the markets harder hit by the housing recession. First signs of deceleration in terms of low quarterly appreciation or even depreciation can also be seen among the largest metros. Among them are Washington (1.2%), Boston (0.8%), Baltimore (0%), Chicago (-1.4%), St. Louis (-1.2%), Charlotte (-0.7%), Philadelphia (-0.6%), New York (-0.3%), Cincinnati (-0.3%) and Pittsburgh (-0.2%).
According to the Zillow Home Value Forecast (ZHVF), we expect national home values to increase 3.2% over the next year (March 2013 to March 2014). Of the 261 markets covered by the Zillow Home Value Forecast, 223 markets are expected to see increases in home values over the next year, with the largest increases expected in the Riverside metro (17.2%) and the Sacramento metro (15.6%). Many California markets follow closely at the top of the list of markets expected to see the highest home value appreciation over the next year. According to the ZHVF, 231 markets (89%) have already hit a bottom in home values, and another 18 are expected to hit a bottom by March 2014. Among the markets expected to see a bottom within the next year are Cincinnati (OH), Chicago (IL) and Philadelphia (PA). These markets have been gliding along the bottom for a while and have not seen sustained home value appreciation to lift them off that bottom.