Home Value Appreciation Set to Ease Over the Next Year

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This is good news for both buyers and sellers. Sustained rapid growth can lead to another housing bust and nobody wants that. For a more detailed look at this subject please read the article below.

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The recent fast-paced home price appreciation across the country led some markets to the brink of a bubble, but deceleration over the summer months has Zillow analysts breathing a sigh of relief as the bubble threat deflates.

Home value appreciation has declined steadily for three months, according to Zillow, and half of the nation’s 20 largest metros experienced negative appreciation in September.

“Far from being a negative sign, we’re relieved to see more noticeable signs of cooling in the market,” said Stan Humphries, chief economist for Zillow.

“If home values continued to rise as they have, relatively unchecked, we would almost certainly be headed into another bubble cycle, and nobody wants that,” Humphries said.

At 1.2 percent, home value appreciation in the third quarter was about half that of the second quarter, according to the U.S. Zillow Home Value Index.

Year-over-year, home values appreciated 6.4 percent, according to Zillow.

Zillow’s Home Value Index is now $163,000.

While some markets continue to struggle, a few California markets—despite having escaped the worst of the housing crisis—have experienced fast-paced price gains over the past year.

Rising prices threatened affordability in these markets as income growth lagged behind.

San Diego, California; Los Angeles, California; and San Francisco, California—all having posted monthly price gains around 3 percent a few months ago—experienced price depreciation at the end of the third quarter.

To read the complete article please use the link below.

Appreciation Set to Ease

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