BrokerPulse

RealTrends Q32021 BrokerPulse sees brokers still optimistic about the market, wary of competition and wondering when inventory will rise.

2021 RealTrends Brokerage Compensation Report

For the study, RealTrends surveyed all the firms on the 2021 RealTrends 500 and Nation’s Best rankings, asking for annual compensation data for the 2020 calendar year.

Knock.com’s Sean Black on the transaction revolution

Real estate is on its third revolution, from the digital revolution of the early 2000s to the information revolution kicked off by Trulia and Zillow to today's transaction revolution.

Newsletter

The RealTrends BrokerSource and HousingWire OpenHouse newsletters deliver twice weekly information on trends, strategies, analysis, people, and news shaping the real estate industry.

Home Values Fell Again in May

Home Values Fell Again in May

Zillow reports a second straight month of declines as well as declining inventory. But rent increases paired with competitive mortgage rates should help the housing market.

U.S. home values dropped for the second month in a row, according to the May Zillow® Real Estate Market Report. The typical U.S. home is worth $226,800, down 0.1% from a month earlier. Home values also fell in April, ending a streak of 85 consecutive months of gains that added $78,500 in value to the median home. This trend held in 32 of the 35 largest markets in the U.S. – home values rose in St. Louis and Phoenix, and remained flat in Riverside.

Year-over-year appreciation, while still strong compared to historic levels, has slowed in each of the past five months, falling to 5.4% growth in May. A year ago, home values grew 7.5% annually. Indianapolis and Cincinnati are the only markets that have accelerated from last May, while San Jose, Calif., remains the lone market to have turned negative year-over-year, falling 5.7%.

“Stepping back to think about housing over the long haul, the current slowdown in home value appreciation is expected and comforting,” said Zillow Director of Economic Research Skylar Olsen. “While the slowdown has been arguably abrupt, the soft declines over the past two months should not cause too much alarm. The aggressive pace of home values over the past several years was known to be unsustainable. Buyers simply couldn’t afford it, so prices are correcting.

The expectation here is that we are steadily returning to normalcy—something U.S. housing hasn’t seen in two decades—and that will mean continued, but ever more moderate, volatility. The significant drop in mortgage rates, as well as renewed rent growth, may help return U.S. housing values to positive appreciation earlier than otherwise.”

While home value growth has slowed, rent prices are accelerating. The median monthly rent in the U.S. grew for the seventh month in a row, rising 2.7% to $1,479. Rents are growing faster now than a year ago in 28 of the top 35 markets, led by Las Vegas at 8.9%.

Inventory fell 0.5% year-over-year in the U.S., the third straight month of declines after inventory rose in January and February. The most significant drop was in Kansas City, which saw 27.8% fewer homes for sale than this time last year. Inventory growth was largest in Las Vegas and San Jose, both of which among the markets where home value growth has slowed the most in the past year.

Mortgage rates listed on Zillow continued to fall in May. Rates ended the month at 3.87%, down 14 basis points from May 1 and 88 basis points from a peak of 4.75% in November 2018. Not coincidentally, Zillow’s stock fell 7%, likely because investors were concerned that its iBuying operation would be impacted by the continued slump in housing, as well as increased competition from institutional investors.

For a look at housing values by metro area, see table below.

Metropolitan Area Zillow Home
Value Index,
May 2019
ZHVI
Month-
over-
Month
Change
ZHVI Year-
over-Year
Change
Zillow Rent
Index, May
2019
ZRI
Year-
over-
Year
Change
Inventory
Year-over-
Year
Change
United States

$226,800

-0.1%

5.4%

$1,479

2.7%

-0.5%

New York, NY

$442,800

-0.2%

3.8%

$2,413

1.5%

5.1%

Los Angeles-Long Beach-Anaheim, CA

$649,700

-0.2%

1.1%

$2,835

3.1%

16.2%

Chicago, IL

$225,700

-0.3%

2.6%

$1,703

4.0%

5.8%

Dallas-Fort Worth, TX

$242,600

-0.5%

6.3%

$1,651

3.5%

11.0%

Philadelphia, PA

$232,400

-0.4%

2.4%

$1,611

2.7%

-10.9%

Houston, TX

$205,200

-0.2%

3.7%

$1,586

2.3%

4.4%

Washington, DC

$407,500

-0.2%

2.2%

$2,179

2.3%

-24.8%

Miami-Fort Lauderdale, FL

$282,500

-0.5%

4.0%

$1,934

3.8%

5.3%

Atlanta, GA

$219,200

-0.4%

8.3%

$1,462

5.0%

11.1%

Boston, MA

$464,200

-0.6%

3.2%

$2,415

2.4%

13.4%

San Francisco, CA

$944,200

-0.4%

0.6%

$3,458

1.8%

21.4%

Detroit, MI

$162,300

-0.2%

6.1%

$1,229

2.8%

14.7%

Riverside, CA

$370,800

0.0%

4.4%

$2,004

5.8%

2.7%

Phoenix, AZ

$266,900

0.0%

5.5%

$1,464

7.2%

0.9%

Seattle, WA

$490,300

-0.5%

1.2%

$2,245

3.0%

23.9%

Minneapolis-St Paul, MN

$271,200

-0.1%

4.8%

$1,706

4.3%

1.5%

San Diego, CA

$591,000

0.0%

1.2%

$2,660

4.6%

11.5%

St. Louis, MO

$166,900

0.1%

3.8%

$1,163

2.1%

-12.8%

Tampa, FL

$214,500

-0.3%

5.6%

$1,454

4.9%

7.2%

Baltimore, MD

$267,500

-0.3%

1.4%

$1,751

0.7%

-12.2%

Denver, CO

$408,000

-0.3%

3.2%

$2,126

3.7%

25.0%

Pittsburgh, PA

$142,800

-0.5%

2.0%

$1,105

2.4%

-13.2%

Portland, OR

$396,800

-0.3%

2.5%

$1,883

2.6%

4.0%

Charlotte, NC

$209,000

0.0%

8.1%

$1,352

4.6%

8.9%

Sacramento, CA

$411,800

-0.1%

3.6%

$1,927

4.6%

-0.4%

San Antonio, TX

$194,000

-0.1%

5.1%

$1,381

3.4%

17.5%

Orlando, FL

$240,100

-0.2%

7.2%

$1,543

6.8%

6.5%

Cincinnati, OH

$170,100

-0.4%

6.9%

$1,305

2.3%

-5.4%

Cleveland, OH

$145,800

-0.5%

4.1%

$1,171

2.7%

-3.6%

Kansas City, MO

$191,900

-0.4%

6.4%

$1,303

2.9%

-27.8%

Las Vegas, NV

$279,300

-0.4%

7.5%

$1,418

8.9%

41.8%

Columbus, OH

$192,300

-0.3%

6.8%

$1,374

3.1%

-3.1%

Indianapolis, IN

$166,300

-0.3%

9.8%

$1,239

3.5%

N/A

San Jose, CA

$1,176,200

-1.4%

-5.7%

$3,583

2.4%

40.6%

Austin, TX

$311,200

-0.1%

5.3%

$1,724

2.6%

-4.3%

Most Popular Articles

Where is the housing market headed?

Rising incomes, low interest rates and all other factors, including the balance between families looking for housing and the availability of housing, point towards a continuation of the strong housing market of the last 15 to 18 months.

Oct 18, 2021 By