- Kristena Hansen
- Reporter-Phoenix Business Journal
The metro Phoenix housing market has long been known for its volatility, so it should be no surprise that it lived up to its reputation through the end of last year, posting the largest — by far — home-value gains in the nation.
The latest figures released Tuesday byZillow Inc. show Phoenix home values soared by 22.5 percent year-over-year during the last three months of 2012.
That’s significantly better than the nationwide average of 5.9 percent growth for the same period, and by far the biggest increase of any major metropolitan area examined by Zillow. San Jose, Calif. trailed far behind in second place at 15.4 percent, followed by San Francisco’s 14 percent and Las Vegas’s 13.9 percent.
Metro Phoenix’s price gains brought the area’s average home value to $157,800 for the fourth quarter, slightly better than the national average of $157,400, the report said.
Valley home values were also up 4.6 percent from just the third quarter, tying with San Diego for the fifth largest quarter-over-quarter jump, the report said. It was also much better than the nationwide average of 2.5 percent quarter-over-quarter.
Zillow economists expect the upswing in Valley home prices to continue through this year, albeit at a much slower 8.5 percent pace. The city of Phoenix should see a slightly bigger increase of almost 10 percent, while areas such as Scottsdale and Paradise Valley will see the biggest hikes of 13 to 14 percent.
Most other parts of the nation also ended the year on a high note — almost 70 percent of all 366 metro areas Zillow examined posted year-over-year home value gains in 2012 and about three-quarters saw an upward trend from the previous quarter, the report said.
The nation’s 5.9 percent annual rate of appreciation was also the fourth consecutive quarter of home value gains and the largest since August 2006.
This year, however, Zillow analysts say they expect the national appreciation rate to reflect that of a more normal, healthy market at about 3.3 percent.
“We expect this recovery to continue into 2013, but at a more sustainable pace,” Stan Humphries, Zillow’s chief economist, said in the report. “It’s important to be cautious moving forward, even as we celebrate the undeniably positive end to 2012, and be careful that consumers don’t grow to expect such high appreciation as the norm. Buying a home should be a long-term decision, and these swings between a deep housing recession and higher-than-normal appreciation rates can give consumers whiplash and cause some to lose sight of that.”