The median home value in the United States dropped from March to April, the first monthly decline since February 2012. This is according to the April Zillow Real Estate Market Report.
A typical home in the U.S. is worth $226,800 – down 0.1 percent from last month – which Zillow says is led by the trends observed in the real estate market of the West Coast.
“The decline […] comes after 85 straight months of gains that brought home values to record highs,” the Zillow release reads. “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.”
While on an annual basis home values have recorded growth of 6.1 percent, the pace of year-over-year appreciation has slowed down in each of the past four months, where the annual growth rate stood at 8.1 percent just five months ago.
Punctuating the fact that a decline in home values on the West Coast led the decline in average home values, the data presents some recorded statistics that specifically relate to the housing market in Southern California.
“Home values fell in 32 of the 35 largest housing markets over April and remained flat in two others,” Zillow’s release reads. “Riverside, Calif., 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.”
While the recorded decline is likely to cause some concern, this data is not yet indicative of a trend or another possible upswing later in the year, says Zillow Director of Economic Research Skylar Olsen.
“The widespread decline in home value growth in April – the first in many years – will turn heads. But it’s too early to say if we’ve hit another national home value peak and are at the beginning of a sustained downturn, or if this is just a bump in the road,” said Olsen in the press release.
Part of the uncertainty arises from the fact that month-to-month figures can often fluctuate, Olsen said.
“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,” he said. “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.”
Home values have likely peaked, the release adds, in the following markets: Los Angeles, Philadelphia, Houston, Miami, Boston, San Francisco, Seattle, San Diego, St. Louis, Tampa, Baltimore, Pittsburgh, Portland and San Jose. However, for-sale inventory has increased in expensive areas, including San Francisco and Seattle.
For more information including detailed regional data, read the press release.