US property prices are expected to rise 3% in the next 12 months but growth will depend on location, according to the latest real estate market report from Zillow.
The Zillow Home Value Index rose to $169,200 in February, up 5.6% year on year and the number of homes listed for sale on Zillow was up 5.5% annually.
However, the firm says that as the spring home buying season heats up, buyers and sellers nationwide can expect very different experiences when it comes to negotiating power. According to the latest Zillow analysis of national buyers' and sellers' markets, sellers in the West will likely have the upper hand in negotiations when selling their home, while buyers in Midwestern and East Coast metros will likely face less competition and have more room for bargaining on prices.
The Bay Area, San Antonio and Los Angeles are the top prospects for sellers and Cleveland, Philadelphia and Tampa the top of the list for buyers, according to Zillow.
In this analysis, a sellers' market is not necessarily one where home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to, or greater than, their last listing price. In buyers' markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price.
The real estate data in markets on both coasts are telling markedly different stories, the report says. ‘Relatively strong job markets in the West are helping spur robust demand, which is being met with limited supply, causing rapid home value appreciation and giving sellers an edge. In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand,’ said Zillow chief economist Stan Humphries.
‘In general, buyers in sellers' markets this spring can expect tight inventory, increased competition and a greater sense of urgency. Sellers in buyers' markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along,’ he explained.
‘As we put the housing recession further in the rear view mirror, the broad based dynamics that applied during those days, when all markets were reacting similarly to nationwide economic conditions, are fading. Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced,’ he added.
He also pointed out that but both monthly and annual US home value appreciation slowed to their lowest paces in months. National home values were almost flat in February from January, and were up 5.6% from February 2013.
The pace of home value growth has slowed in recent months as more inventory of for sale homes has helped meet demand. Nationwide, while inventory remains tight, the number of homes listed for sale on Zillow was up 5.5% annually in February.
For the 12 month period from February 2014 to February 2015, national home values are expected to rise another 3% to approximately $174,285, according to the Zillow Home Value Forecast.
The data also shows that national rents rose in February from January, up 0.2% to $1,310. Year on year, national rents were up 2.8% in January.
This article was republished with permission from Property Wire.