In this rollercoaster year of housing news, where ominous warnings of a new recession driven by rising home prices mingle with cheerier assertions that markets are slowly but surely getting back to stable, the latest snapshot from Zillow brings some good news for homebuyers and sellers.
Zillow's August Home Value Index, released Friday, shows that U.S. home values in August rose at a cool 0.1 percent from July.
This cooling of price increases is good news for both buyers and sellers, as slow growth makes for a market in which final sales numbers are more in sync with actual property values.
August's values were also 6.6 percent higher than those in August 2013.
Inventory of all for-sale homes nationwide rose 20.6 percent year-over-year and 2.1 percent month-over-month in August, and the pace of home value appreciation is expected to slow to 3.1 percent through August 2015, according to the Zillow Home Value Forecast.
According to Zillow, sellers in Bay Area California, Seattle, Dallas-Fort Worth, and Denver have the greatest leverage. Sellers in these markets have the upper hand because of either traditionally strong appeal (as in San Francisco) or growth in jobs (as in Dallas, where the pending opening of Toyota's North American headquarters in neighboring Plano is bringing 4,000 workers to the Metroplex by 2017). Sales in these areas are more often higher than the asking price.
Zillow defined a sellers' market as one not necessarily in which home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently, and homes are sold at prices close to or higher than their last listing prices.
For those looking to buy a home, Providence, Cleveland, Philadelphia, Milwaukee, and Chicago offer the most favorable conditions. According to Zillow, buyers in these markets are less likely to be faced with the fierce bidding wars taking place in California, Dallas, Denver, Las Vegas, and Nashville. According to Zillow, in buyers' markets, homes for sale stay on the market longer, price cuts occur more frequently, and homes are sold for less relative to their listing price.
Nationally, the average home price according to Zillow was $175,600 in August. If all trends stay as they are, this number should rise to $180,970 by next year.