The latest Home Value Index from Zillow had nothing but good things to share about the housing market, with U.S. home values increasing 5.9 percent in 2012 over 2011.
Furthermore, the Home Value Index also increased in 2012’s fourth quarter, rising 2.5 percent from the third quarter; that’s the fourth consecutive quarter in a row of national home value appreciation.
Home Value Index – Home Values Stabilizing Nationwide
Other highlights from Zillow’s Home Value Index report included:
- That 5.9 percent increase in home values from 2011 to 2012 is the largest annual gain for home values since 2006, aka the housing bubble years.
- No worries, though – Zillow is not predicting another housing bubble; the Internet company did suggest, though, that 2013 will not be quite as spectacular as 2012 was in terms of home values and home prices, and its predicting appreciation in 2013 to be around 3.3 percent, or, more in line with how home values traditionally increase.
- For the Home Value Index, Zillow surveyed 366 metropolitan areas, and 69 percent registered home value increases in 2012; 278 of those metro areas, or 76 percent, saw home values increase on a quarterly basis.
- Perhaps the most intriguing aspect of the Home Value Index related to its findings on national rents, which it found to have decreased by 0.6 percent from the third quarter to the fourth quarter.
- Though national rents did increase 4.2 percent from 2011 to 2012, that decrease is perplexing, given how contradictory similar studies have been on the rental markets; could Zillow, like Reis before them, be on to something with the rental markets? We’ll have to wait and see.
- Specific to Chicago, the Second City was one of only two cities in Zillow’s study, actually, to show annual and quarterly decreases in home values in the fourth quarter; but still, as we reported just yesterday, numerous communities in and around Chicago reported strong median price increases for December, so perhaps Chicago is beginning to turn the corner on prices.
Stan Humphries – Expectations Met in 2012
Stan Humphries, the chief economist at Zillow, said that the housing market of 2012 met everyone’s expectations and more, though he also said that 2013 could be a more modest market by comparison.
“We expected 2012 to be a good year for housing, and it delivered in spades,” Humphries said. “Strong demand paired with limited inventory in many markets helped fuel a robust and often rapid recovery in overall home values, good news for homeowners after years of poor performance. We expect this recovery to continue into 2013, but at a more sustainable pace.”