Home appreciation is running at a faster pace for those with the least expensive homes due to inventory imbalances
Home appreciation is running at a faster pace for those with the least expensive homes due to inventory imbalances.
A new analysis from Zillow reveals that owners of starter homes have seen their equity rise 44% in the past five years while the most valuable homes have added 27%.
The disparity is explained by the high demand and tight supply of entry-level homes and Zillow data which shows that less affluent owners typically have more of their wealth in their home than more affluent homeowners.
"When the housing market crashed, owners of the least valuable homes were especially hard hit, and lost more home value than homeowners at the upper end of the market," said Zillow senior economist Aaron Terrazas. "Since then, though, demand for less expensive, entry-level homes has built steadily, causing prices to grow rapidly. As a result, these homeowners have been able to build wealth at a faster pace than owners of more expensive homes."
On an annual basis, owners of starter homes have seen their value rise 8.5% as first-time buyers have escalated; owners of the most expensive homes saw a 3.6% gain in value.
The exception are San Francisco, Seattle and San Jose, where price appreciation of the most expensive homes are gaining faster than value faster than starter homes.
|
Metropolitan Area |
Bottom |
1-Year |
5-Year |
Top Tier |
1-Year |
5-Year |
|
United States |
$120,100 |
8.5% |
44.4% |
$363,000 |
3.6% |
26.6% |
|
New York, NY |
$260,200 |
8.5% |
24.1% |
$790,600 |
5.7% |
29.2% |
|
Los Angeles-Long Beach-Anaheim, CA |
$436,700 |
9.0% |
66.2% |
$1,062,000 |
7.8% |
44.7% |
|
Chicago, IL |
$122,100 |
5.0% |
31.6% |
$373,400 |
1.3% |
19.6% |
|
Dallas-Fort Worth, TX |
$132,100 |
10.5% |
78.8% |
$391,100 |
5.4% |
46.5% |
|
Philadelphia, PA |
$117,800 |
5.2% |
16.7% |
$388,900 |
3.0% |
16.1% |
|
Houston, TX |
$125,300 |
12.7% |
71.4% |
$331,200 |
2.6% |
28.3% |
|
Washington, DC |
$238,700 |
3.1% |
34.1% |
$666,600 |
-0.1% |
13.9% |
|
Miami-Fort Lauderdale, FL |
$138,100 |
10.1% |
102.2% |
$463,000 |
2.1% |
39.2% |
|
Atlanta, GA |
$107,300 |
12.8% |
77.9% |
$366,500 |
4.0% |
41.1% |
|
Boston, MA |
$283,400 |
8.5% |
41.5% |
$732,600 |
5.2% |
33.9% |
|
San Francisco, CA |
$530,900 |
9.5% |
103.3% |
$1,559,400 |
11.6% |
70.4% |
|
Detroit, MI |
$53,700 |
17.2% |
46.3% |
$286,600 |
4.0% |
41.3% |
|
Riverside, CA |
$226,900 |
9.7% |
87.2% |
$498,500 |
6.9% |
46.8% |
|
Phoenix, AZ |
$166,900 |
9.8% |
85.4% |
$410,200 |
4.7% |
30.5% |
|
Seattle, WA |
$298,300 |
12.1% |
79.7% |
$832,900 |
13.5% |
67.9% |
|
Minneapolis-St Paul, MN |
$171,700 |
6.2% |
48.0% |
$391,800 |
3.0% |
26.4% |
|
San Diego, CA |
$416,300 |
7.7% |
64.6% |
$876,700 |
6.9% |
37.8% |
|
St. Louis, MO |
$77,400 |
6.5% |
20.0% |
$280,400 |
-1.8% |
17.4% |
|
Tampa, FL |
$110,500 |
20.4% |
95.2% |
$337,400 |
1.5% |
43.1% |
|
Baltimore, MD |
$138,700 |
3.8% |
13.9% |
$452,100 |
-0.3% |
10.8% |
|
Denver, CO |
$267,600 |
9.5% |
92.8% |
$577,600 |
5.7% |
45.9% |
|
Pittsburgh, PA |
$75,400 |
9.9% |
27.4% |
$249,600 |
2.1% |
21.9% |
|
Portland, OR |
$274,300 |
8.3% |
80.3% |
$559,600 |
2.6% |
50.9% |
|
Charlotte, NC |
$107,900 |
16.9% |
40.1% |
$347,900 |
5.5% |
30.6% |
|
Sacramento, CA |
$270,400 |
9.8% |
101.0% |
$565,200 |
5.6% |
44.1% |
|
San Antonio, TX |
$103,500 |
18.4% |
50.4% |
$296,600 |
5.7% |
27.0% |
|
Orlando, FL |
$126,300 |
12.6% |
86.3% |
$334,400 |
0.9% |
35.5% |
|
Cincinnati, OH |
$95,400 |
8.8% |
28.1% |
$276,100 |
3.4% |
20.7% |
|
Cleveland, OH |
$70,400 |
8.0% |
19.3% |
$250,100 |
3.4% |
18.4% |
|
Las Vegas, NV |
$151,700 |
19.9% |
104.4% |
$368,300 |
9.7% |
59.6% |
|
Columbus, OH |
$94,900 |
12.3% |
40.2% |
$312,600 |
6.5% |
31.8% |
|
San Jose, CA |
$751,000 |
18.0% |
87.6% |
$2,096,700 |
18.9% |
73.8% |
|
Austin, TX |
$189,000 |
8.1% |
57.9% |
$479,900 |
5.5% |
37.8% |
|
Virginia Beach, VA |
$142,200 |
2.5% |
9.9% |
$359,400 |
0.5% |
9.0% |
|
Nashville, TN |
$147,700 |
14.3% |
58.5% |
$407,800 |
6.7% |
41.2% |
