As homebuyers try to get more for their money and flee the expensive coastal housing markets, the largest jumps in annual home appreciation took place all around the country’s interior, according to Zillow.
The average U.S. home was valued at $223,900 in December 2018, a 7.6% year-over-year jump. Of the 35 largest housing markets, 23 had a rate below the national average.
“Looking at the nation as a whole, housing appreciation seems stabilized at an arguably aggressive pace,” Skylar Olsen, Zillow’s director of economic research and outreach, said in a press release. “The exceptions to the rule are the metros that saw the fastest appreciation over the past few years, where home values far outpaced incomes.”
Atlanta experienced the highest climb in home values, seeing a 13.2% growth from a year ago. Las Vegas came second with 13% and Indianapolis was third at 12.8%. Contrarily, Washington had the lowest growth with 3.5%, followed by Philadelphia at 3.6% and Los Angeles at 3.9%.
“Employment growth continues, but that kind of extreme home value growth isn’t sustainable, and homebuyers’ willingness and ability to outbid each other is falling back fast,” Olsen continued. “We expect continued slowdowns in those expensive coastal markets. A three-month trend in increasing inventory ended, telling buyers that the pendulum hasn’t fully swung in their favor for this year’s home shopping season.”
After three months of year-over-year growth, housing inventory had a slight dip, declining 0.4% from December 2017. New construction has had trouble gaining traction as homebuilders face regulatory issues, as well as high land and lumber costs.
The housing markets that saw the largest boost to their inventory are those where high home prices pushed down demand. San Jose, Calif., led the nation with a 47.6% spike in for-sale supply in homes, followed by Seattle at 32.9% and San Diego at 32.2%.