U.S. home values rose more slowly in August than they have in a year, and the cooling market offered a clear view of local markets that favor either buyers or sellers.
The nation’s hottest markets, on the West Coast, continued to favor sellers with quick sales and high asking prices. But some still-recovering markets remained a bargain for buyers as more homes went up for sale.
U.S. home values rose in August, up 0.1 percent from July and 6.6 percent from August 2013, to a Zillow® Home Value Index of $175,600, according to the August Zillow Real Estate Market Reports. The pace of home value appreciation is expected to slow to 3.1 percent through August 2015, according to the Zillow Home Value Forecast.
According to the latest Zillow analysis of buyers’ and sellers’ markets, sellers in the Bay Area, Seattle and Dallas have the most negotiating power, with final sale prices largely at or above asking. For those looking to buy a home, the Northeast and Midwest offer the most favorable conditions, as buyers are less likely to be faced with the fierce bidding wars seen across the West Coast and in larger cities across the country.
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.
“Real estate has always been local, but as we continue to put the housing recession further in the rearview mirror, the largely uniform performance of local markets is also fading,” says Zillow Chief Economist Dr. Stan Humphries. “We now have several different types of markets emerging, including markets that are still muddling along the bottom; markets that shot up immediately after the recession ended and are now cooling quickly; and markets that are still very hot. Each of these environments presents unique challenges and opportunities for buyers and sellers, and what works in one area won’t necessarily work in another.”
National home values have risen month-over-month for more than two years, though the pace of monthly home value appreciation has slowed as a result of increased for-sale inventory entering the market. The number of homes listed for sale on Zillow in August was up 20.6 percent year-over-year and 2.1 percent month-over-month.
National rents rose in August from July, up 0.7 percent to a Zillow Rent Index (ZRI) of $1,328. Year-over-year, national rents were up 3.3 percent in August.
For more information, visit www.zillow.com.
