Despite big gains in home values, the U.S. housing market recovery is uneven with some markets seeing huge growth and others still experiencing declines. Here are 10 markets with the best expected growth for 2013.
Despite big gains in home values, the U.S. housing market recovery is uneven, according to the third quarter Zillow Real Estate Market Report. In the third quarter of 2012, home values rose 1.3% over the previous quarter and are forecasted to increase 1.7% over the next year.
The quarterly gain is the largest since 2006. However while some areas are seeing a rapid increase in home values — home values in the Phoenix metro area are up 20.4% year-over-year (y-o-y) — others are still seeing falling home values.
“We’re likely seeing home values fall back into the negative range in some markets due to the close of the traditional home-buying season,” said Zillow Chief Economist Dr. Stan Humphries on Zillow’s blog. “While that doesn’t mean the recovery has come off the rails — in fact, most markets have hit bottom — it does present a confusing environment for consumers. Looking forward, we expect to see home values bump along the bottom for some time, before increasing at a slow and steady pace.”
The average home value in the third quarter was $153,800, an increase of 3.2% y-o-y. According to Zillow, part of the strong home value appreciation is a result of inventory shortages (which drove up the prices in the most expensive ZIP codes) and less foreclosure re-sales. Zillow expects 71.5% of the 253 markets it covers to see increases in home values over the next year.
While the majority of housing markets have already hit the bottom, there are still 70 markets to go. Zillow is forecasting that 41 of the remaining markets — including St. Louis, Mo.; Cleveland, Ohio; and Jacksonville, Fla. — will see a bottom by September 2013.
Foreclosures are down as well. In September 5.7 out of every 10,000 houses were liquidated — the slowest pace since December 2007.
Here are the 10 housing markets expected to see big gains in 2013.
10. Denver, Colo.
The Denver Pavilion in downtown
Forecasted growth in 2013: 1.9%
Average home price in Q3 2012: $221,000
9. Portland, Ore.
The Arlene Schnitzer Concert Hall
Forecasted growth in 2013: 2.9%
Average home price in Q3 2012: $224,300
8. San Diego, Calif.
Entrance to San Diego’s historic Gaslamp Quarter
Forecasted growth in 2013: 3.4%
Average home price in Q3 2012: $356,100
7. Los Angeles, Calif.
Forecasted growth in 2013: 3.5%
Average home price in Q3 2012: $397,000
5. (tie) San Francisco, Calif.
Forecasted growth in 2013: 3.8%
Average home price in Q3 2012: $497,600
5. (tie) Miami-Fort Lauderdale, Fla.
The Art Deco District in Miami
Forecasted growth in 2013: 3.8%
Average home price in Q3 2012: $149,700
4. San Jose, Calif.
Forecasted growth in 2013: 4.2%
Average home price in Q3 2012: $599,800
3. Sacramento, Calif.
Forecasted growth in 2013: 5.6%
Average home price in Q3 2012: $210,900
2. Riverside, Calif.
Historical Victoria mansion in Riverside
Forecasted growth in 2013: 6.2%
Average home price in Q3 2012: $187,800
1. Phoenix, Ariz.
Forecasted growth in 2013: 8.5%
Average home price in Q3 2012: $149,400