Q1 2007 Home Value Reports: U.S. Real Estate Market Continues to Sputter (But Still No Tailspin)

Date:May 1, 2007 | Author:Stan Humphries | Category:Market Trends

Tonight we launched our Q1 2007 Home Value reports, with separate data sets for both the U.S. and 46 metropolitan areas (all data can be obtained here).  Particularly in the local markets, there’s a lot to dig into — for most areas, we’ve broken out trends by county, city and individual neighborhood. 

Home values turned in another lackluster performance in the first quarter of 2007 with the U.S. Zindex down 1% from the prior quarter (from $256,950 last quarter to $254,346 in the areas in which Zillow has data coverage) and down 0.83% on a year-over-year basis (see chart below).  This is the second quarter in a row in which home values have declined both on year-over-year and quarter-over-quarter basis.  Those looking for good news in the data can take some solace in the fact that the one percent quarterly decline is better than the 4.77% decline seen in the fourth quarter of 2006 relative to the prior quarter.  Essentially, at the national level, we continue to observe a general stagnation in home values but no dramatic or sharp decline in values. 

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The Northwest continues to be quite robust in terms of price appreciation with the five metropolitan areas in Zillow’s coverage area with the highest year-over-year Zindex appreciation rates being Corvallis, OR (17.26%), Grand Junction, CO (16.57%), Seattle, WA (12.03%), Bellingham, WA (11.68%), and Portland, OR (10.72%).  The worst five markets on a year-over-year basis were Sarasota, FL (-15%), Punta Gorda, FL (-12.4%), Santa Barbara, CA (-11.8%), Pittsfield, MA (-8.6%), and Reno, NV (-8.5%).  See the chart below for year-over-year appreciation rates in the 25 largest metro areas covered by Zillow.

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New to the reports this quarter is information about the median sale price of homes posted for sale on Zillow and the median Make Me Move price posted on Zillow.  Also new is the value of a typical home in various metro areas around the country.  From this data, one can get an apples-to-apples comparison of how much the same house fetches in different real estate markets.  For this analysis, we used the most typical configuration of home facts found across all homes in our database (1,500 square feet; 3 bedrooms; 2 bathrooms) and computed the median Zestimate for all such homes in each metro area in which we have coverage.  The results for the top 25 largest metro areas in our coverage area are shown in the chart below.  Across all 46 metro areas covered this quarter, the typical house was most expensive in the following metro areas (in descending order of expensiveness): Santa Barbara, San Francisco, Honolulu, LA, San Diego and New York.  Theoretically, one could sell their “typical” home in Santa Barbara (for a cool $816K) and buy more than eight just like it in Tulsa, OK (each for only $97K).  Go Tulsa!

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As always, kudos to Tommy Unger for pulling all this fabulous data together.  Look out for some interesting deep dives into specific local markets by Tommy in the coming weeks. Enjoy the data and let us know what interesting insights you find lurking there. 

Dr. Stan Humphries is a real estate economist and real estate expert for Zillow. Stan is in charge of the data and analytics team at Zillow, which develops housing market data for most major metropolitan statistical areas in the U.S., and provides economic research for current real estate market conditions. He helped create the algorithms for the popular Zestimate® home value and the Zillow Home Value Index (ZHVI).