Photo: Robert Clark
The US housing market has gained $10.9 trillion in value since the bust and is now worth $4 trillion more than it was at the peak of the housing bubble, but its future outlook is beginning to fade, according to a new report by the listing site Zillow.
“During the second half of 2018, price appreciation slowed sharply in the priciest corners of the country while it picked up in affordable hotspots. Periods of stability often precede periods of instability, and the outlook for 2019 is certainly both cloudier and blurrier than the outlook a year ago,” says Aaron Terrazas, Zillow’s senior economist.
After gaining $1.9 trillion in value in 2018, the US housing market is worth a cumulative $33.3 trillion. The national housing market grew 6.2 percent over the past year.
“Housing wealth may have touched new highs this year, but home value gains don’t translate into dollars in the bank account unless homeowners opt to sell or borrow against their home and, in contrast to previous housing booms, many Americans have been more reluctant in recent years to spend against their home’s worth,” says Terrazas.
While at the state level, the booming California housing market accounts for nearly one-third of the total value gained during the recovery.
California’s total housing value has grown by $3.7 trillion since early 2012, and it is the only state that has gained more than $1 trillion in value since the market collapsed.
Comparatively, the New York housing market accounts for 6.1 percent of the total value gained, amounting to $672 billion.
Ten states, including Florida, have yet to regain the value lost during the financial crisis.
Despite holding the number two spot when it comes to dollar contribution to the national housing recovery — a contribution of $937.9 billion, or 8.6 percent of the overall recovery — the total value of all the homes in Florida is still $263.9 billion below its pre-crisis peak level.
At the metro level, the New York City area is the country’s most valuable single housing market, worth almost 10 percent of the nation’s overall value. It was valued at a cumulative $2.5 trillion in 2018.
Unsurprisingly, four white-hot California markets – Los Angeles, San Francisco, San Jose, and San Diego – were among the top 10 most valuable metros in the country.
The Las Vegas, San Jose and Atlanta metro areas gained the most value in 2018 among the 35 largest metros analyzed in the report, with each market recording double-digit growth during the year.