Zillow’s January Real Estate Market Reports, released today, show that national home values rose 0.7% from December to January to $158,100 (Figure 1). January 2013 marks the 15th consecutive month of home value appreciation. On a year-over-year basis, home values were up 6.2% from January 2012 – a rate of annual appreciation we haven’t seen since July 2006 (when the rate was 7.5%), before the peak of the housing bubble. Rents are up 4.3% on a year-over-year basis. The Zillow Home Value Forecast calls for 3.3% appreciation nationally from January 2013 to January 2014. Most markets have already hit a bottom – with only 9 out of 260 not projected to hit a bottom within the next year – and 78 out of the 260 markets covered are forecasted to experience home value appreciation of 3% or higher.
The improvement in the market is driven by many factors, including near record-low mortgage rates, a drop in the number of home foreclosures, the tight supply of both new and previously owned homes available for sale, and an improvement in the overall economy, including a lower unemployment rate. These factors are combining to bring potential buyers who have been scared to buy during the housing downturn back into the market.
The resulting rise in home prices was the biggest annual increase since the second quarter of 2006, near the height of the housing boom. The sales of new homes were at the highest level since July 2008, about two months before the bursting of the housing bubble slammed the brakes on home sales.
Housing recovery gains strength ~ CNN Money
Case-Shiller: Seattle Home Values up 8.2% in 2012 ~ Nice Seattle Homes
How a love letter can seal the real estate deal ~ Yahoo Homes
Downtown Seattle’s rebound ~ Seattle Times