The final tallies for U.S. home prices are coming in for the fourth quarter of last year and it appears the market experienced a significant gain. Zillow reports a 5.9% gain in residential real estate prices over 2011, which marks the biggest jump since the peak in 2006. Further, Zillow’s Home Value Forecast predicts another 3.3% price increase over the course of 2013. Experts note, however, that the national average does not reflect good health in every region and that superior performance in some areas balanced out lesser growth, or even losses, in other parts of the country. For more on this continue reading the following article from Property Wire.
US home values increased by 5.9% in 2012, the largest annual gain since August 2006 close to the peak of the market, the latest figures show.
The Zillow Home Value Index rose to $157,400 in the fourth quarter of last year, up 2.5% on the third quarter and marking four consecutive quarters of national home value appreciation.
The 5.9% annual appreciation rate far exceeded yearly rates of appreciation typically associated with healthy markets. Historically, housing markets can expect annual home value appreciation of roughly 3% on average, according to Zillow research.
Looking ahead, the Zillow Home Value Forecast shows home values increasing by 3.3% in 2013, a yearly appreciation rate more in line with historic norms.
Home value appreciation was widespread last year. Of the 30 largest metros covered by the index only Cincinnati and Chicago failed to show annual and quarterly increases in the fourth quarter.
Of the 366 total metro areas analyzed, 254, or 69%, registered annual home value gains in 2012 and 278 metros experienced quarter-over-quarter home value appreciation.
However, annual home value growth rates varied widely among the nation's 30 largest metros, underlining the uneven recovery the housing market is experiencing. Growth rates ranged from a high of 22.5% year on year appreciation in Phoenix to a low of 0.2% depreciation in Cincinnati and Chicago. Seven of the top 30 metros registered annual home value increases of 10% or more.
‘We expected 2012 to be a good year for housing, and it delivered in spades. 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,’ said Zillow chief economist Stan Humphries.
However, he said it is important to be cautious moving forward and people should not expect such high appreciation as the norm. ‘Buying a home should be a long term decision, and these swings between a deep housing recession and higher than normal appreciation rates can give consumers whiplash and cause some to lose sight of that,’ he explained.
As home values rose in the fourth quarter, foreclosure activity abated, with 5.22 of every 10,000 homes nationwide facing foreclosure during December 2012. That was down 2.2 homes per 10,000 year on year and down 1.2 homes from the previous quarter. Foreclosure re-sales stood at 12% of the market, down 4% from the end of 2011 and down 0.3% from the third quarter.
In the rental market, national rents fell 0.6% in the fourth quarter compared with the third quarter, but ended 2012 up 4.2% year on year. The Zillow Rent Index stood at $1,274 at the end of December.
This article was republished with permission from Property Wire.