2017 and 2018 saw a hot US housing market as home value growth surged across major metro areas. However, the 2019 real estate market is showing signs of a continually balancing environment, Zillow reports.
US Home Value Trends 2019
In November of 2019, average home value growth was at 3.8% reaching $243,225. This was the lowest home value gains have been since January 2013. In fact, for the past 19 months, growth has continued to slow down. Still, there is year-over-year (YOY) growth and the drop from month to month during that timeframe has not been more than 0.3 percentage points. Overall, the data points to a return to a balanced market on the national level.
Of course, real estate market trends vary from one location to another. Leading the way as one of the hottest real estate markets in the US for property value growth this year is the Phoenix real estate market at 6.1% YOY. The markets that followed with high growth were:
- Columbus real estate market: 5.9%
- Charlotte real estate market: 5.8%
- Indianapolis real estate market: 5.7%
The main driving factors for the growth of real estate value in these markets is their relative affordability and positive employment outlook. If you’re a real estate investor looking to buy investment property at the beginning of 2020, these 4 housing markets are some of the best places to invest in real estate.
The San Antonio and Washington DC housing markets were the only 2 metros areas among the 35 studied in Zillow’s report to show a higher home value growth rate than last year.
However, other markets have not fared as well. The Las Vegas real estate market and the Seattle real estate market have slowed down the most. For these locations, however, it’s a good sign that the environment is returning to normal.
The San Jose and San Francisco real estate markets are the only metro areas that experienced a drop in home values YOY. But even in these locations, the drop has been decreasing over the last few months.
It’s Still a Good Time to Own or Buy Rental Property
When real estate investors or other players in the US housing market hear of drops in property value or declines, it makes everyone wary of owning or buying an investment property.
However, investing in rental properties right now is a wise move. Not only has property value growth slowed down, but US rents are up. Zillow reports that the typical US rent is $1,600 which is a YOY increase of 2.3%. In fact, rents have continued to grow for 5 months in a row. And once again, the Phoenix housing market is leading the nation as the fastest growing real estate market for rents with an increase of 7.6% YOY.
Start searching for a profitable rental property in the Phoenix real estate market right now.
The Las Vegas real estate market came in second with rent growth at 5.1% YOY. However, the following markets saw a drop in rent YOY:
- Columbus real estate market: down 1.9%
- Houston real estate market: down 0.7%
- San Antonio real estate market: down 0.2%
US Housing Inventory Continues to Drop
Housing inventory continues to fall, with a 6.4% YOY drop- the largest decline in 20 months. Compared to this time last year, inventory is down by 102,463 homes. The largest declines were in the following markets:
- Seattle real estate market: down 28.8%
- Sacramento real estate market: down 21.2%
- San Diego real estate market: down 19.9%
There may be some relief in sight for the housing inventory shortage as US housing permits recently hit a 12-year high nationwide. Homebuyers and real estate investors will soon find more options in the residential market as housing starts in this sector saw an increase of 3.2%.
The US Real Estate Market Is Forecast to Heat Up Again Soon
Of note is the real estate market trends by quarter. Quarter-over-quarter home value growth has increased consecutively over the last three months. And although rates are slower than this time last year, it is a sign that the slowdown may not continue for much longer as we enter 2020. In general, the US housing market forecast 2020 points to a healthy market with increased housing permits and starts, strong employment trends, and more sustainable real estate appreciation.
Related: Data Shows the US Housing Market Is Heating Up
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