In another sign of historically unprecedented growth in real estate, a new report from Zillow found that U.S. housing stock added $6.9 trillion in value in 2021—a single year record—fueled by runaway home appreciation and pandemic-driven new construction.
Gaining a staggering $500 billion per month on average between June and December, the combination of a stampede to build more homes to meet rising demand and a nearly 20% price growth in existing residences pushed the overall value of domestic housing stock to $43.4 trillion, more than double its value a decade ago.
Though the real estate industry has remained mostly optimistic about continued growth in 2022, it’s unlikely this year will see these kinds of numbers as inventory continues to be tight in the face of strong demand.
The tremendous growth of last year can stand on its own, with every single region and type of home buoyed by the rising tide.
Regions and Price Points
While nearly every market saw some growth, not all states shared equally in the largesse, with non-coastal regions in the South and Mountain West gaining proportionally more than traditionally popular metros and markets. Though California still accounts for a huge proportion of the nationwide real estate value ($9.24 trillion, or 21.3%), its value only grew by $1.38 trillion, or 20.1% of 2021 growth—” underperforming,” according to Zillow.
On the other hand, Florida—which makes up 6.4% of total real estate—contributed 8.3% of new value last year, “over-indexing” by 30.9% as it pulled more than its weight in national growth.
Other states that added significantly more value proportional to their bottom-line include Idaho (64.1% over-indexed), Utah (49.2%) and Montana (46.3%).
Metros, conversely, added value mostly in line with their population size, as New York and Los Angeles topped the list. There were a few exceptions, however, as Austin, Texas grew the same amount in total value as Houston, despite being significantly smaller and Phoenix, Arizona broke the top five even though it is only the 14th largest metro.
More expensive houses also contributed significantly more in terms of value, with the top third of homes in terms of value accounting for 60.8% of the nationwide total. The bottom third only made up 12.8%, while the middle third contributed 26.4%.
Jesse Williams is RISMedia’s associate online editor. Email him with your real estate news ideas to jwilliams@rismedia.com.
