WooHoo! Homes Values are Rising at a ‘Normal’ Pace
Homeowners were thrilled in 2005 and early 2006 when prices skyrocketed and sales were faster than the speed of light. By mid 2006 it was evident that the rapid increase in home prices and the pace of home sales was wickedly unnatural and would most definitely not last. Panic started setting in around the first half of 2007 along with plenty of questions, rumors, and lots of regret. As much fun as that was for some home sellers, it was an equal disaster for home buyers, and an absolute catastrophe for the economy in general. Seriously, you won’t want to see another real estate bubble anytime soon. This is all by way of explaining why, in the real estate market at least, slow and steady always wins the race.
It’s not just favorable conditions as dictated by the time of year, overall economic stability is playing a huge role in the strength of home values right now. Recovery has been dragging its feet but I believe we’ve finally arrived. The current average annual increase in home prices of 6 to 7 percent is a historical norm, demonstrating that consumers are driving the market in a very orderly way. Believe me, this is a good thing.
New Construction has been playing a role as well. Developers are seeing an increase in demand, which creates confidence within the the building industry and stimulates the movement of resale homes as a result.
The chart below compares 10 major metropolitan real estate markets, with the national averages for median home price and rate of growth.
Homes Appreciating at Pre-Bust Pace
Homes have appreciated to pre-bust pace, with values rising at an annual rate of 6.5 percent, according to Zillow’s recently released Real Estate Market Reports, with the Zillow Home Value Index (ZHVI) at a median of $192,500. The pace of growth is the fastest since the 2006 peak of the bubble, when homes were appreciating at an annual rate of 11 percent.
“Home value growth continues to be strong, supported by solid buyer demand and still limited for-sale inventory in many markets across the country,” say Zillow Chief Economist Svenja Gudell. “Conditions today are very different than the ones we saw back in 2006, which was the last time we saw home values rising this fast. Rampant real estate speculation and loose mortgage credit have been replaced by the sound economic fundamentals we are seeing now.”
The most year-over-year growth in November, according to the Reports, was recorded in Dallas, Texas, Portland Ore., and Seattle, Wash.; homes appreciated 12 percent in both Dallas and Seattle, and 14 percent in Portland.
Rent appreciation, however, has slowed to an annual rate of 1.5 percent—expected to continue to next year—with the median rent at $1,403, per the Reports. Seattle, as well, posted the most year-over-year growth, at 9 percent.
Comparing metropolitan areas:
For more information, Call or Text: 602-999-0952
Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management
For more information, please visit www.zillow.com. Reprinted with permission from RISMedia. ©2016. All rights reserved.
Next time you decide it’s time to move, let us help, with our Moving On Advantage! When you list your home with us, and buy another, we’ll contribute $2,000 toward your closing costs!
Check out our Moving On Advantage, then call us for a FREE, no obligation, Market Analysis: 602-999-0952
Thinking about buying a brand new home? Our New Construction Discount is perfect for you! Don’t visit construction sites without your agent. Representation is FREE and remember, the sales person at the construction site works for the builder, not for you!
Find/Search ALL New Construction Homes for Sale in the Greater Phoenix Area
*Cash Back Credit is equal to 25% of the agent’s buyer-side commission and will be returned to you at closing in the form of a credit toward your closing costs. New Construction Discount is available on New Construction homes with a minimum base price of $200,000. Cash Back Credit can not be combined with other Realtor cash back or discount offers and must appear on your HUD1 Settlement Statement at closing. You must be a client of BillSalvatore, Arizona Elite Properties.