U.S. home values in 2012 rose 5.9 percent over 2011, according to data in Zillow's latest Home Value Index (HVI).
The 5.9 percent appreciation rate is the largest annual gain since August 2006, near the peak of the housing bubble.
While
the market still has some ground to cover before its completely healthy
again, Zillow said in a release that 2012s appreciation rate far
exceeded yearly rates of appreciation typically associated with healthy
markets, which can expect annual home value appreciation of roughly 3
percent on average.
Looking
ahead, the Zillow Home Value Forecast projects an appreciation rate of
3.3 percent in 2013, more in line with historic norms.
In
addition, the fourth quarter of 2012 saw home values rise to an average
$157,400, up 2.5 percent over Q3, according to the fourth quarter
Zillow Real Estate Market Reports.
Of the 30 largest metros covered in the HVI,
only Cincinnati and Chicago failed to report annual and quarterly
increases in the fourth quarter, Zillow said. Of the 366 total metros
analyzed, 254 (69 percent) registered annual home value gains in 2012,
while 278 (76 percent) experienced quarter-over-quarter appreciation.
Though
the recovery in home values appears to be widespread, its not balanced
among metros, Zillow said. According to the report, growth rates ranged
from a high of 22.5 percent yearly appreciation in Phoenix to a low of
0.2 percent depreciation in Cincinnati and Chicago. Seven of the top 30
largest metros posted annual home value appreciation of 10 percent or
higher.
We
expected 2012 to be a good year for housing, and it delivered in
spades, said Zillow chief economist Dr. Stan Humphries. 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.
While
home value appreciation is expected to slow down in 2013, Humphries
said the anticipated 3.3 percent annual appreciation rate is more
sustainable. That said, consumers should be careful to temper their
expectations accordingly.
Its
important to be cautious moving forward, even as we celebrate the
undeniably positive end to 2012, and be careful that consumers dont grow
to expect such high appreciation as the norm, Humphries said. 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.
As
home values rose throughout 2012s fourth quarter, foreclosure activity
declined, with 5.22 out of every 10,000 homes nationwide facing
foreclosure in December (down 2.2 homes per 10,000 year-over-year and
1.2 homes quarter-over-quarter). The share of foreclosure re-sales
dropped to 12 percent, down 4 percent from the end of 2011 and 0.3
percent from the third quarter.
Meanwhile,
national rents fell 0.6 percent from the third quarter to the fourth;
however, rents were up 4.2 percent year-over-year in 2012. The Zillow
Rent Index stood at $1,274 at the end of December.
Source: DSNews
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