While home value appreciation in some of the hottest housing markets is beginning to decelerate, some of the nation’s more affordable markets, especially in the South, are picking up speed, according to the December Zillow Real Estate Market Report, released Thursday.
San Jose, California, and Seattle, Washington, have hit the brakes harder than any other major market, while Atlanta, Georgia, pulled ahead.
Home value appreciation in San Jose slowed from 16.8 percent in December 2017 to 9.9 percent in December 2018. In Seattle, home values grew at a pace of 12.4 percent in December 2017 and slowed to a rate of 5.0 percent in December 2018.
On the other hand, home values in Atlanta accelerated from 8.1 percent in December 2017 to 13.2 percent in December 2018.
Seven markets experienced double-digit rent growth in December with Atlanta leading the pack. Atlanta was followed by Las Vegas, Nevada; Indianapolis, Indiana; Dallas, Texas; Charlotte, North Carolina; Tampa, Florida; and Kansas City, Missouri.
Outliers aside, national home value appreciation “seems stabilized at an arguably aggressive pace,” according to Skylar Olsen, Director of Economic Research and Outreach at Zillow.
Nationally, home values rose 7.6 percent over the year in December, similar to the previous year’s 7.4 percent growth. The national median home value as of December was $223,900.
Olsen clarified, “The exceptions to the rule are the metros that saw the fastest appreciation over the past few years, where home values far outpaced incomes.”
In total, home value appreciation slowed down in 19 of the 35 largest markets in December, according to Zillow.
Rents also increased in December, rising at their fastest rate since June. The national median rent in December was $1,460, up 1.4 percent from a year ago.
The largest increase in rents took place in Orlando, Florida, where rents rose 6.4 percent over the year. Riverside, California, followed with a 5.3 percent increase in rents.
While overall home prices continued their upward trajectory, housing inventory backpedaled. After three months of growth, inventory retracted 0.4 percent on an annual basis in December, which according to Olsen is an indication to buyers “that the pendulum hasn’t fully swing in their favor for this year’s home shopping season.”
Despite the national contraction, Zillow noted that a few markets “that were starved for homes for sale are seeing big gains, led by San Jose (up 47.6 percent), Seattle (up 32.9 percent) and San Diego (up 32.2 percent).”