Here's where Zillow says home values are headed
Real estate megalith expects some markets to have affordability issues
Although 2014 brings more forecasts of improvement for the housing market, this sunny forecast is not guaranteed to reach all top housing markets.
Homes values are estimated to rise another 4.8% through December 2014, but local market trends are expected to differ, which may cause confusion and uncertainty among homebuyers and sellers, the latest Zillow report found.
"Affordability issues will help put the brakes on many markets that saw huge appreciation rates, like California and the Southwest, creating volatility that could potentially cause whiplash for homebuyers and sellers," said Zillow Chief Economist Stan Humphries.
"The same time, we expect more homes to be available this year as more sellers enter the market and more homes get built, and a decline in investor competition should make for a more hospitable market for many buyers."
All but one of the nation’s 35 largest metro areas are expected to show annual rates of appreciation, but the results vary widely by region.
Riverside, Calif., is projected to grow 16.1%, compared to Kansas City, which will grow to just 0.4%.
St. Louis is the only top city estimated to record a drop, with prices expected to fall 3.1%.
“The housing recovery is entering the middle innings after an incredible run in 2013. Below the surface of last year’s market, a number of unsettling trends started to emerge as a result of rapid and ultimately unsustainable appreciation, setting up a bit of a mixed bag for 2014,” Humphries said.
In 2013, home values ended the fourth quarter up 6.4% year-over-year, a robust bounce off the bottom that is beginning to trail off in most areas and could cause problems in a handful.
The U.S. Zillow Home Value Index stood at $169,100 at the end of the fourth quarter, up 1.4% from the end of the third quarter, and 0.6% from November.
"The housing recovery is entering the middle innings after an incredible run in 2013. Below the surface of last year’s market, a number of unsettling trends started to emerge as a result of rapid and ultimately unsustainable appreciation, setting up a bit of a mixed bag for 2014,” Humphries added.
"While a truly ‘normal’ market remains a ways off, we expect to take more steps in that direction as appreciation moderates, negative equity recedes, federal stimulus is withdrawn and foreclosures wane.”