Nationwide, home values fell from March to April, the first month-over-month decline since 2012, but Ada County is bucking the trend with record median sales prices.
Zillow’s April Real Estate Market Report shows that the typical U.S. home is worth $226,800, down 0.1% from last month. The decline – led primarily by large West Coast markets – comes after 85 straight months of gains that brought home values to record highs.
In contrast, the median sales price for existing homes in Ada County hit $309,900 in March 2019, an increase of 6.9% year-over-year and a record high for the county, according to Boise Regional Realtors. For new construction, sales are gaining more and more of the total market share in Ada County. Since new homes generally sell for more than existing homes, new home sales continue to have a greater impact on the overall median sales price. In February 2019, new construction sales made up 38.7% of all home sales in Ada County. In March 2019, that share increased to 39.8% resulting in an overall median sales price of $335,000, an increase of 8.4% year-over-year and a record high for Ada County.
In Ada County’s existing home segment, median sales price has been rising due to a persistent lack of supply, especially in the lower price points, Boise Regional Realtors said. An increased share of higher-priced existing homes has contributed to the higher median sales price reported for the existing home segment.
Across the U.S., home values fell in 32 of the 35 largest housing markets over April and remained flat in two others. Riverside, California, was the only large market that saw its home values appreciate during the month. This downturn has been a longer-term trend in other large California markets – home values have fallen in at least each of the previous three months in San Jose, San Francisco, San Diego and Los Angeles.
Home values have likely peaked in Los Angeles, Philadelphia, Houston, Miami, Boston, San Francisco, Seattle, San Diego, St. Louis, Tampa, Baltimore, Pittsburgh, Portland and San Jose, Zillow said.
U.S. home values have experienced declines only twice over the past few decades: during the recession of the early 1990s and the Great Recession and housing crisis in the late 2000s. On an annual basis, U.S. home values grew 6.1%. But the pace of year-over-year appreciation has slowed in each of the past four months, falling from 8.1% annual growth as recently as December.
“Month-over-month numbers are volatile, and this small decline could reverse itself before the year is out and before national home values go negative on a year-over-year basis,” said Zillow Director of Economic Research Skylar Olsen. “That said, the likelihood that home values have peaked in several local markets is real. The price correction in these areas should continue after years of significant home value growth that substantially outpaced income growth.”
Rent prices continued to accelerate nationally, growing for the sixth consecutive month. The median U.S. rent rose 2.6% on an annual basis to $1,477. Of the metro areas Zillow analyzed, rents grew the fastest in Las Vegas (up 7.8%), Phoenix (up 6.7%) and Orlando (up 6.4%).
Inventory fell 1.7% year-over-year in the U.S., but despite the drop nationally, for-sale inventory has grown significantly in expensive West Coast markets San Jose, Seattle and San Francisco – due to cooling demand rather than a flood of new listings.