Collectively, homes nationwide are expected to have gained $1.9 trillion in value by the end of 2013, marking the largest annual increase in cumulative value since 2005, according to Zillow’s Real Estate Markets Report.
Zillow calculated its expected gain for this year by measuring the difference between cumulative home values as of the end of 2012 and the anticipated cumulative home values at the end of 2013.
The overall accumulated value of all homes in the U.S. at the end of 2013 is expected to be approximately $25.7 trillion, an increase of 7.9% compared to 2012’s total values, according to Zillow’s analysis.
The $1.9 trillion gain in 2013 represents the second annual increase for cumulative home values, after home values fell every year from 2007 through 2011, during which the total value of U.S. housing stock fell by $6.3 trillion.
Since then, the past two years have seen U.S. home values return $2.8 trillion, or 44%, of the total value lost during the recession.
Zillow Chief Economist Stan Humphries attributes this recovery to an improving economy driven by low mortgage rates that attracted more homebuyers into the market.
“We expect these gains to continue into next year, though at a slower pace,” Humphries said. “The housing market is transitioning away from the robust bounce off the bottom we’ve been seeing, toward a more sustainable, healthier market. This will result in annual appreciation closer to historic norms of between 3% and 5%.”
As for the 485 total metro areas analyzed by Zillow, nearly 90% experienced home value gains in 2013.
Cities with the largest gains in overall values in terms of total dollar volume include Los Angeles ($323.1 billion), San Francisco ($159.2 billion), New York ($123.1 billion), Miami ($83.8 billion) and San Diego ($71.5 billion).
Written by Jason OlivaPrint Article