Markets that were the fastest-growing in the country just a year ago are starting to slow down, according to a report from Zillow. The Zillow Real Estate Market Report for July shows that otherwise expensive and in-demand markets such as Seattle, Tampa, Sacramento, and Portland, which were leading the market, have reported the largest slowdown in home value appreciation year-over-year.
Seattle, for example, fell from the top growing spot in the nation to 12th, the greatest slow down of the year. Seattle fell from a year-over-year home growth of 14.2 percent in 2017 to 9.1 percent in 2018. Other large metros such as Portland saw drops, from 9.0 percent to 5.7 percent. Sacramento felt a similar decline, from 9.2 percent to 5.7 percent.
Despite the slow growth of these large markets, annual appreciation is still higher than the historical average in the majority of markets. For example, Tampa saw values rise 10.5 percent year-over-year, compared to a historical average rate of around five percent.
"The nation's pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade," said Zillow Senior Economist Aaron Terrazas. "But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it's far too soon to call it a buyer's market."
Additionally, the amount of homes for sale has dropped, though Zillow notes that the rate of this decline is slowing. Potential home buyers may find around four percent fewer homes on the market year-over-year, however, this is the smallest decline in 17 months.
Despite the slowdown in the Bay Area, Terrazas said that in many of the nation's more affordable areas, "home value growth has perked up as buyers continue to seek good value for their money. But it's clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift."
Find the full report from Zillow here.