MSR Americas Inc. Blog

“U.S. Market Completes 13th Straight Month of Home Value Appreciation”—Zillow

Posted on: January 30th, 2013

An exhaustive report released recently from Zillow, the U.S. online real-estate research company, announces that “November 2012 marks the 13th consecutive month of home value appreciation,” and that home “values were up by 5.2% in November 2012” on a “year-over-year basis.”

Credible Data

Zillow’s report is the first comprehensive report of its kind on the current U.S. housing market and “covers 361 metropolitan and micropolitan areas,” which is more markets than any other source of real estate data, claims Zillow.  Bloomberg BusinessWeek was quick to echo the report’s findings on its site, noting that “low interest rates, improving employment, and prices that remain almost 30 percent below their July 2006 peak have drawn buyers back into the market.”

There’s little doubt about the recovery of the U.S. housing market as November’s “rate of annual appreciation” is the kind that “we haven’t seen since August 2006 (when the rate was 6%), before the peak of the housing bubble,” says Zillow’s chief economist and report’s author Stan Humphries.

Rental Markets Strong

Of particularly good news for Florida vacation and investment properties is that “rents are still appreciating, currently at 4.5% on a year-over-year level,” writes Humphries.  “Even as the housing market picks up steam again, the rental market remains strong.”

Humphries comments on the reason for the particularly strong rental market:

“Part of the reason the for-sale market has been seeing such strong home value appreciation in some [. . .] Florida markets (among others) is that investors have been buying for-sale properties, mostly distressed, and have been converting them to for-rent units to satisfy increased demand since the housing bubble burst.”

All of this is familiar to our investing partners, who enjoy consistent rental returns of 8 to 10% on their Florida investment properties, as well as concurrent capital appreciation.  But it’s still good to have it reaffirmed by a prominent new study.

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