If you thought 2017 would bring lower home prices, think again, because all evidence points to the contrary. A recent Zillow real estate market report shows that national home values rose 6.5 percent since last November, to a median value of $192,500. This is the fastest pace of appreciation since 2006, near the peak of the housing bubble, when home values were appreciating at about 11 percent annually.
In Dallas the median home value is $200,400, up 12 percent over the past year, putting metro home values at their peak. Put in plain English, this means that even during the housing boom around 2006, home values were never as high as they are now. Adding insult to injury, there are also 13.9 percent fewer homes to choose from than a year ago.
In addition to Dallas, strong growth is also evident in a handful of new markets, including Seattle and Portland, as well as Denver. This is attributed to strong job markets attracting new homebuyers to these cities over the last year.
At their fastest pace, home values across the country were appreciating at about 11 percent year-over-year. When the bubble burst, home values plummeted, falling 7.4 percent year-over-year before beginning a steady recovery in 2012.
“Home value growth continues to be strong, supported by solid buyer demand and still limited for-sale inventory in many markets across the country,” says Zillow’s chief economist Dr. Svenja Gudell. “Conditions today are very different than the ones we saw back in 2006, which was the last time we saw home values rising this fast. Rampant real estate speculation and loose mortgage credit have been replaced by the sound economic fundamentals we are seeing now.”
Portland, Seattle, and Dallas reported the highest year-over-year home value appreciation among the 35 largest U.S. metros. Portland home values rose 14 percent to a median value of $351,800. Seattle tied with Dallas, with home values rising 12 percent since last November.
In Houston, home values rose around 7 percent, with the median price of homes at $176,000.