U.S. home values are up over 6 percent over the past year, to a Zillow Home Value Index (ZHVI) of $191,200, according to the October Zillow Real Estate Market Reports.
Home values across the country have been rising for more than four years. Due to low inventory, prospective buyers often face intense competition. Less than half of buyers are successful in purchasing the first home they make an offer on, according to the Zillow Group Consumer Housing Trends Report.
Despite unfriendly market conditions for buyers, housing experts predict things will change in the near future – the majority of experts surveyed in the latest Zillow Home Price Expectations Survey said they expect the housing market to shift from a seller’s market to a buyer’s market in 2018 or 2019. Zillow forecasts home values to slow to a 3 percent appreciation rate by next October.
“The housing market has been favoring sellers for the past few years,” said Zillow Chief Economist Dr. Svenja Gudell. “Sellers in the current housing landscape often have the luxury of listing their home ‘as-is’ without fixing it up or with only minimal window-dressing since demand for homes has been high and inventory low. It’s common for sellers to receive multiple bids, and in the hottest markets, sell for over asking price, but these conditions will change in the future. As the number of homes for sale increases and home value appreciation slows, we expect the market to meaningfully swing in favor of buyers within the next two to three years.”
Portland, Dallas and Seattle reported the highest year-over-year home value appreciation among the 35 largest metros across the country for the third month in a row. Home values in Portland rose almost 15 percent to a median value of $349,500. Dallas and Seattle home values have appreciated just over 12 percent since last October.
Rents across the nation are up 1.4 percent, to a median rent payment of $1,402 per month. Seattle, Portland and Sacramento reported the highest year-over-year rent appreciation among the 35 largest U.S. housing markets. Rents in Seattle are up 9 percent to a Zillow Rent Indexiv (ZRI) of $2,087. Rents in Portland and Sacramento are up 7 and 6 percent, respectively.
There are 6 percent fewer homes for sale across the country than a year ago, with Boston, Indianapolis and Kansas City reporting the greatest drop in inventory among the 35 largest U.S. metros. In Boston there are 26 percent fewer homes to choose from than a year ago, and 24 percent fewer in Indianapolis.