The end of 2012 marked the fourth consecutive quarter in which the nation’s home values appreciated, and that trend is expected to continue in 2013, real estate website Zillow reported Jan. 21 in its Fourth Quarter Real Estate Market Reports.
The nation’s average home value rose to $157,400 during the fourth quarter, up 2.5 percent from the third quarter. The nation’s appreciation rate from 2011 to 2012 was 5.9 percent — the largest annual gain since the peak of the housing bubble in August 2006.
Historically, housing markets can expect annual home value appreciation of about 3 percent on average, Zillow reported. For 2013, Zillow indicated that home values could increase by 3.3 percent, an annual appreciation rate aligned with historic norms.
“We expected 2012 to be a good year for housing, and it delivered in spades,” Dr. Stan Humphries, Zillow chief economist, said in a news release. “Strong demand paired with limited inventory in many markets helped fuel a robust and often rapid recovery in overall home values, good news for homeowners after years of poor performance. We expect this recovery to continue into 2013, but at a more sustainable pace.”
Chicago and Cincinnati were the only cities out of the 30 largest metro areas included in the report that did not show annual and quarterly increases during the fourth quarter. Of the 366 total metro areas studied, 254 registered annual home value gains in 2012, while 278 metros experienced quarter-over-quarter home value appreciation.
Foreclosure activity subsided as home values rose in the fourth quarter, with 5.22 of every 10,000 homes nationwide facing foreclosure during December 2012 — down 2.2 homes per 10,000 year-over-year and down 1.2 homes from the previous quarter, according to the report. Foreclosure re-sales also were down, accounting for 12 percent of the market — a 4 percent drop from the end of 2011 and down 0.3 percent from the third quarter.
Read Zillow’s Fourth Quarter Market Reports.