Zillow Group IR Blog

July 2018 Real Estate Market Report

Home-Value Growth Slowing in Several Hot Markets

  • The median U.S. home value climbed 8 percent over the last year to $218,000, but growth is slowing in 20 of the 35 largest U.S. housing markets, with Seattle and Tampa, Fla., reporting the greatest slowdowns.
  • One reason for the slowdowns is a greater number of homes for sale than there were a year ago in 19 of the 35 largest metros – including Seattle and Tampa.
  • The rental market also shows signs of a slowdown, with median U.S. rent inching up just 0.5 percent from a year ago to $1,440. The last time rents climbed that slowly was in late 2012.

The median U.S. home value climbed 8 percent over the past year to $218,000, but in a sign that buyers are beginning to balk at sustained, rapid escalations in prices, home value growth is slowing in 20 of the 35 largest housing markets. Four of the hottest markets – Seattle, Tampa, Sacramento, Calif., and Portland, Ore. – reported the greatest slowdowns from their growth rates at this time last year.

Seattle, which led the country in home-value growth of 14.8 percent in June 2017, is now the 12th fastest-appreciating housing market with year-over-year values climbing at 9.1 percent in July. Home values are partly a function of how many homes are available for sale, and Seattle had 13.2 percent more homes on the market in July than it had a year earlier. Nationally, there were 3.9 percent fewer homes for sale than a year ago.

Tampa’s growth slowed to 10.6 percent (for a median home value of $205,900), Sacramento and Portland each to 5.7 percent ($400,800 and $391,800, respectively).

While 8 percent annual growth for U.S. home values is above the 7.3 percent annual growth from July 2017, it is down slightly from growth earlier in 2018. And Zillow forecasts the annual appreciation rate will slow to 6.8 percent by this time next year.

Home values are still growing faster in most major markets than they did historically, one reason it’s too soon to call it a buyer’s market. Lower-valued homes also continue brisk gains: Homes valued in the lower third nationally rose 10.9 percent in value year-over-year, while homes valued in the top third rose at less than half that, at 4.9 percent.

Rent slowdown, too

The rental market shows signs of a slowdown as well.

The median U.S. rent rose 0.5 percent over the past year to $1,440 (a month), down from 1.6 percent growth a year earlier. Among the 35 largest housing markets, 21 had slower annual rent appreciation in July than a year earlier, with Seattle, Portland and Kansas City leading the slowdown. Still, rents rose 0.3 percent in Seattle and fell by 0.7 percent in Portland and 1 percent in Kansas City.

Median rent climbed the most in Riverside, Calif., where it was up 4.6 percent from July 2017 to $1,898. It was followed by Sacramento, up 4.4 percent to $1,842 and Las Vegas, up 3.2 percent to $1,305.

Inventory crunch also eases

Home shoppers in July had 3.9 percent fewer homes to choose from than a year earlier – the slowest pace of declining inventory since March 2017.

Columbus, Ohio, and Atlanta posted the largest drops in inventory at 14.4 percent and 14.2 percent, respectively.

The largest gains in inventory were in the pricey markets of San Jose, Calif., where inventory rose 46.2 percent from last July, and San Diego, where it climbed 36.3 percent.

Check out Zillow Research for a closer look at the economy through the lens of the housing market.
Zillow Group August 2018 IR Roundup August 2018 Real Estate Market Report