Providence metro home values rise; forecast shows signs of cooling
ACCORDING TO THE Zillow home value index released Friday, the median home value in the Providence metro area rose 6.2 percent to $221,900 in the third quarter compared with the same period last year, bringing metro area home values to April 2003 levels.
SEATTLE – The median home value in the Providence metro area rose 6.2 percent to $221,900 in the third quarter compared with the same period last year, according to the Zillow Real Estate Market Report released Friday.
Metro-area home values – defined by Zillow as “the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives” – in the third quarter reached levels not seen since April 2003, as measured by the Zillow home value index, “the median value for all homes in a given area, not just those that have recently sold.”
This growth reflects the 6.4 percent year-over-year increase nationwide, up from a 5.8 percent increase in the second quarter. Homes across the nation increased 1.2 percent in value since the end of the second quarter, marking the seventh consecutive quarter of appreciation.
Providence metro area homes appreciated 2.4 percent in value since the end of the second quarter, according to the Zillow report.
Sacramento, Las Vegas and San Francisco reported the largest year-over-year appreciations, rising 34.1 percent, 33.3 percent and 25 percent, respectively.
However, the national pace of monthly home value appreciation has fallen in each of the past three months, and turned negative in San Diego (-1.2 percent), Los Angeles (-1.1 percent) and San Francisco (-0.1 percent) in September, after reaching into the 3 percent range in all three metros just a few months ago, the Zillow report stated.
“Far from being a negative sign, we’re relieved to see more noticeable signs of cooling in the market,” said Zillow Chief Economist Stan Humphries. “If home values continued to rise as they have, relatively unchecked, we would almost certainly be headed into another bubble cycle, and nobody wants that.”
The Zillow forecast anticipates a 1.5 percent increase in Providence metro area home values in the coming year, and a 3.8 percent increase nationally.
“This is more proof that the market recovery is entering a new phase, transitioning away from the bounce off the bottom we’ve been experiencing and finding a more sustainable level,” said Humphries. “This moderation should help consumers feel more at ease in their decisions to buy and sell, and will help keep the market balanced.”
The Providence metro area Zillow rent index fell to $1,479 in the third quarter, down 0.1 percent since last year and 0.3 percent in the past month.
National rents rose 1.3 percent this quarter compared with the second quarter, and increased 2 percent on an annual basis.
Foreclosures in the Providence metro area fell 1.2 percent in the third quarter compared with the same period in 2012, with 3.35 foreclosed homes per 10,000. The state’s rate of foreclosed homes is lower than the national rate of 5.12 homes per 10,000 during the third quarter.