Dive Brief:
- Home prices across the U.S. rose 5.1% between August 2014 and August 2015, according to the S&P/Case-Shiller 20-City Composite Index.
- San Francisco, Denver, and Portland, OR, saw the greatest year-over-year gains. The National Home Price Index, which measures all nine U.S. census divisions, rose 4.75% in August from the same month in 2014.
- The standout metric in rising home prices is the performance of condominiums, which are appreciating at 5.1% annually, compared with single-family home appreciation of 3.7%, according to the third-quarter Zillow September Real Estate Market Report.
Dive Insight:
"Home prices continue to climb at a 4%-5% annual rate across the country," David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices, said in a statement. Most other housing indicators are strong, but Blitzer added that new home sales fell sharply in September, likely due to low inventory.
However, Zillow said the big story is condo market performance. Increasing rents, a limited inventory of low-priced single-family homes, and the desire for an urban environment have caused condo values to skyrocket, particularly in tech markets like Denver and San Jose, CA, where single-family home prices have also been on the rise, according to Zillow economists.
"The housing bust hit condo values hard, and over the past few years, buying a condo wasn’t always considered a good investment compared to a single family home," Zillow Chief Economist Svenja Gudell said. "But that’s changing, and condos increasingly represent a strong-performing, often affordable choice, particularly for first-time buyers interested both in homeownership and in keeping a lower-maintenance, city lifestyle."
