Differences in Home Value Trends by Price Level of the City
I thought it was time we revisited the earlier analysis we did on how home value trends vary by the typical home value of a city. Previously, we found that most metros displayed a pattern in which cities with higher-priced real estate had experienced less decline in home values since the peak of home values in the metro market (relative to cities with lower priced real estate in the same metro).
Returning now to the issue armed with May 2010 data from the Zillow Home Value Index, we find a much more mixed picture in terms of the relationship between prevailing home values at peak and peak-to-current declines in home values. The table below shows the classification of metro regions according to whether the higher-priced cities within the metro have seen more, less or the same degree of decline in home values since the peak in the market.
In the San Francisco metro area, the price level of a city has had a huge impact on how far home values have fallen. At peak, a typical home in Antioch – in Contra Costa County east of the Bay – had a value of $516,000 but home values there have fallen 63% since then. That’s in sharp contrast to Hillsborough – in San Mateo County – where a typical home was valued at almost $2.6 million at peak and home values have declined only 10% since then. Some of this effect is due to the timing of the housing downturn in these two cities. Antioch went into decline before Hillsborough but the former is now seeing positive monthly appreciation (0.9% in May) whereas the latter is still seeing negative appreciation (-0.6% in May). So stay tuned, peak-to-decline values may look quite different than they do today in this market.
Below the table is an interactive chart showing the patterns for each metro region (as an aside, Tableau visualization software is truly remarkable. While we’re an open source R shop for the most part, Tableau has certainly found a place here when visualization of data is needed).
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).