U.S. home values poised for best year since 2005
Value of U.S. residential real estate likely increased by 6% this year
Owners of homes in the U.S. saw the value of their real estate increase by an average of six per cent in 2012, the first annual increase in more than five years.
Data tracking firm Zillow Inc. said Thursday it expects U.S. homes will have increased in value by a cumulative $1.3 trillion US in 2012, bringing the total value of residential real estate to $23.7 trillion.
U.S. real estate lost $792 billion in value last year, the firm says.
The expected gains in 2012 are the first annual increase since 2006, when U.S. home values increased by a cumulative $483 billion.
That was just before the subprime mortgage bubble started to burst the following year, touching off a recession and economic slowdown that is still cascading through the global economy to this day.
Earlier this week, the National Association of Realtors revealed the average U.S. home was worth $180,600 this month, up 10 per cent from the same month a year ago.
For comparison purposes, the average Canadian home was worth $356,687 in November, up 0.8 per cent from last year's level. The Canadian Real Estate Association says for the year as a whole, it expects Canadian real estate to increase by 0.3 per cent this year, followed by a percentage increase of the same amount in 2013.
Real estate turnaround
The rebound announced Thursday was welcome news to the U.S. home industry, which has been undergoing tough times since even before the recession.
The worst year for U.S. real estate on record was 2008, when home values decreased by $3.2 trillion.
"This gain in cumulative home values is welcome and long-awaited, after years of cumulative value declines," Zillow chief economist Stan Humphries said.
"The housing market really turned a corner in 2012, as historic affordability and sustained investor interest helped keep demand at a boil," he added.
Zillow tracked 177 of the largest real estate markets in the country for the analysis. This year, more than three-quarters are in positive territory for the calendar year.
Among the 30 largest markets, Philadelphia is the only one to post a decline.
Philadelphia real estate lost $1.6 billion in value this year, an improvement from the $28.9-billion decrease in value in 2011.