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The majority of metros covered in Zillow’s Real Estate Market Reports saw home values inch up from March to April, the company reported Tuesday.
Zillow’s Home Value Index climbed to $158,300 for April, an increase of 0.5 percent month-over-month and 5.2 percent year-over-year. April marked the sixth consecutive month in which home values appreciated more than 5 percent on a yearly basis.
According to Zillow, the last time national home values were at this level was in June 2004. However, this kind of growth will likely be short-lived, said Zillow chief economist Dr. Stan Humphries.
“April marks the sixth straight month of annual home value appreciation of 5 percent or above, the longest such streak since the height of the bubble in 2006. In the short-term, this has been welcome news for homeowners. But in the long-term, this cannot be sustained, and consumers entering the market today should not expect this kind of appreciation to last,” Humphries said.
Fifty-percent of the 365 metros tracked reported rising home values in April. Of the 30 largest areas, Sacramento experienced the largest monthly increase at 3.4 percent. Other large metros with notable monthly gains include Las Vegas (3 percent) and San Francisco (2.8 percent).
On a yearly basis, 29 of the 30 biggest markets posted increases, with more than half going up by double-digit percentages. The largest improvements were seen in Phoenix (25.5 percent), Sacramento (25.4 percent), San Jose (25.2 percent), San Francisco (24.8 percent), and Las Vegas (23 percent). Chicago was the only market to see home values decline year-over-year (-0.2 percent).
For the 12-month period ending April 2014, Zillow projects home values will rise a more moderate 4 percent to approximately $164,648, reflecting shifts in supply and demand in some of the nation’s hard-hit markets.
“Overall, we expect home value appreciation to moderate as more supply comes on line over the next year, but in some areas, runaway home value appreciation, combined with expected interest rate hikes in coming years, runs a real risk of pricing out many potential buyers. Home values in these areas will have to flatten or even fall to come back in line,” Humphries explained.
Zillow also reported a slight monthly decline in national rents, which were down 0.2 percent from March. Year-over-year, rents were up 3.9 percent in April.
The number of completed home foreclosures in April fell to 4.81 homes foreclosed out of every 10,000 homes nationwide, down from March and April 2012. Foreclosure resales represented 12 percent of homes sold in April, down 1 percentage point from March and 4 percentage points from a year ago.