Homes nationwide are expected to gain almost $1.9 trillion in cumulative value in 2013 – the second consecutive annual gain and the largest since 2005 – according to the analysis of Zillow Real Estate Market Reports.
According to the report, the overall value of all homes in the U.S. at the end of 2013 is expected to be approximately $25.7 trillion, which is up 7.9% from the end of 2012. Last year, cumulative home values rose 3.9% from 2011.
The gain in cumulative home values is the second annual gain in a row, after home values fell every year from 2007 through 2011, says Zillow. Between 2007 and 2011, the total value of the U.S. housing stock fell by $6.3 trillion. Over the past two years, U.S. homes have gained back $2.8 trillion, or about 44% of the total value lost during the recession, according to the data.
‘In 2013, the housing market continued to build on the positive momentum that began in 2012, after the housing market bottomed. Low mortgage rates and an improving economy helped bring buyers into the market, boosting demand and driving prices up,’ says Stan Humphries, chief economist for Zillow.
Almost 90% of the 485 total metro areas analyzed nationwide experienced home value gains in 2013, according to the report. Of the 30 largest metros, those with the largest gains in overall value as measured by total dollar volume include Los Angeles ($323.1 billion), San Francisco ($159.2 billion), New York ($123.1 billion), Miami ($83.3 billion) and San Diego ($71.5 billion).
‘We expect these gains to continue into next year, though at a slower pace," Humphries continues. The housing market is transitioning away from the robust bounce off the bottom we've been seeing, toward a more sustainable, healthier market. This will result in annual appreciation closer to historic norms of between three percent and five percent.’