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ArlingtonReal EstateRegional home-value appreciation still in double digits

Regional home-value appreciation still in double digits

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The Washington region’s year-over-year home-value-appreciation rate is tracking right along with its national counterpart, according to new data.

With a typical home value of $498,649, the D.C. region was up 11.5 percent in April compared to a year before, according to new figures from Zillow.

That firm uses its own listings and other data to compile average home values for large metropolitan areas. While not tracking exactly with similar data compiled by groups such as the National Association of Realtors, all such analyses have been pointing up for home values across the region and nation over the past year.

And despite not-unreasonable concerns from the public – Google searches for “housing bubble” have been rising exponentially in recent months – Zillow economist Jeff Tucker said the market is not in danger of overheating, as occurred nearly 20 years ago.


“Both of these hot markets saw extreme price appreciation in a relatively short period of time. But that’s where the similarities end,” Tucker said.

“Unlike the combination of speculators and people spending beyond their means with non-traditional loans in 2004 and 2005, today’s home-buying demand is driven by well-qualified buyers locking in traditional, fixed-rate mortgages,” he said. “Builders are firing on all cylinders to meet the excess demand brought by low mortgage rates and millions of Millennial buyers jockeying for limited homes.”

(The new-home segment of the market, however, has hit roadblocks due to increasing material costs and what are likely to be more regulatory hurdles imposed by a Democratic presidential administration and Congress. The National Association of Home Builders recently castigated the Biden administration for proposing higher tariffs on Canadian lumber at a time prices for wood were spiking.)

This spring, homes continue selling at record pace despite the enormous leaps in home values. Nationally, it typically only takes seven days after listing for a seller to accept an offer, while the Midwest markets of Kansas City, Columbus and Cincinnati are seeing listings disappear in an average of just three days.

Sun Belt and Mountain West markets lead all major (50 largest) metros in annual appreciation, notably Austin (up 25.5 percent to $441,931) and Phoenix (up 20.4 percent to $355,822). Close behind was Salt Lake City, up 18.3 percent. When taking into account the 100 largest metros, the highest year-over-year price appreciation was found in Boise, at 32.5 percent.
Zillow economists expect another year of home-value appreciation lies ahead, forecasting 11.8-percent growth through April 2022.

All the growth has made for a wild ride for the likes of first-time buyer Tiauna Hansen and her fiancé, Tyler Hensley, who estimate they placed offers on 15 homes before finally closing on a two-bedroom, one-bath house near Boise in April.

The young couple had been under contract to purchase another home when the appraisal came back lower than their offer price and the deal fell through.

“We were so excited to buy our own home,” says Hansen. “We had already made plans to add on to that house and build a workshop, only to have to start our search all over again. But that experience ultimately left us more determined, and led us to the house we’re in now, which is perfect for us.”

The couple used an FHA loan and down-payment assistance to purchase their new home at full asking price, and now can turn their attention to their wedding in September.

Their story will resonate with thousands of shoppers struggling in today’s market, but despite abundant tales of bidding wars, not every house is selling above list.

Of all home sales closed in February (the last month with full data), 28.6 percent sold above their initial list price. That’s more than twice the share that sold above list in February last year, but it still means the other 71.4 percent sold at list price or below.

More than half of homes sold above list price nationally were found just in four metros: San Francisco and San Jose (the only two communities among the 50 largest where the Zillow home value tops $1 million) along with Seattle and Salt Lake City.

Metros with the lowest share of homes sold above list price are Miami (11 percent), Orlando (13 percent) and Las Vegas (15 percent).

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