Zillow Inc (NASDAQ:Z), one of the leading providers of information about the real estate market, estimated that the home values in the United States gained 6 percent for the first time since 2005.
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According to Zillow Inc (NASDAQ:Z), the home values in the country increased by more than $1.35 trillion to $23.7 trillion since the end of 2011. The company predicted that the home values in the country would continue to climb until next year.
The values of residential homes dropped since 2007, and the biggest declined happened in 2008. At that time, home values dropped by more than $3.2 trillion. Last year, the cumulative home values fell by almost $792 billion, according to Zillow Inc (NASDAQ:Z).
Among the 177 metro areas analyzed by the Seattle-based home listing company, 135 or 75 percent experienced gains in home value this year. According to Zillow, Philadelphia was the only area, among the 30 largest metro areas, that failed to record an annual cumulative gain in home values.
The metro areas with the largest annual cumulative gains in home values includes; Los Angeles ($122.1 billion), San Francisco ($93.3 billion), San Jose, Calif. ($54.7 billion), Phoenix ($52 billion) and Miami-Fort Lauderdale ($47.5 billion).
Dr. Stan Humphries, chief economist at Zillow Inc (NASDAQ:Z) said, “This gain in cumulative home values is welcome and long-awaited, after years of cumulative value declines. After a sluggish 2011, the housing market really turned a corner in 2012, as historic affordability and sustained investor interest helped keep demand at a boil.”
Humphries also expected a continued slow transition into a more normal housing environment driven by local market fundamental and conditions.
Stephen Hagenbuckle at TerraCap Partners, a real estate private equity firm based in Florida states, “Buying and selling in the residential market continues to improve at a steady clip despite the lack of adequate supply of new housing out there. We expect to this activity transfer over into the commercial real estate market at some point as banks accelerate their unloading of foreclosed office buildings and retail space.”
A report from Bloomberg cited that the sales of previously own homes increased by 5.9 percent last month to an annual rate of 5.04 million, and the median resale price was $180,600, 10 percent higher than the median price recorded in November last year.
Yesterday, the Department of Commerce reported that permits to build new homes surged to a four-year high last month.
In a research note to investors, Michael Widner, an analyst at Stifel Nicolaus & Co said a “virtuous circle” fuels the rising demand that would drive economic growth, housing construction, and price increases.