The value of the housing market in the United States reached a cumulative $33.3 trillion in 2018, with California accounting for almost a third of the growth, a new report shows.
It means that since the market hit its lowest point in 2012, it has gained $10.9 trillion in value, and is now worth $4 trillion more than it was at the peak of the housing bubble, according to the data from real estate firm Zillow.
The New York/Northern New Jersey area is the most valuable single housing market in the nation, worth nearly 10% of the total market, while four of the 10 most valuable, Los Angeles, San Francisco, San Jose and San Diego are in California.
The data also shows that the overall value of the Las Vegas, San Jose and Atlanta housing markets saw double digit value growth in 2018. At the other end, Chicago’s housing value saw only minimal gains, up 1.6% or $12.5 billion.
California housing market has grown by $3.7 trillion since early 2012 and the analysis of the figures shows that it is the only state that has gained more than $1 trillion in value since the market fell.
However, 10 states have yet to regain the value lost during the economic downturn. Despite holding the number two spot when it comes to dollar contribution to the national housing recovery, some $937.9 billion or 8.6% of the overall recovery, the total value of all the homes in Florida is still $263.9 billion below its peak level.
According to Aaron Terrazas, Zillow senior economist, 2018 was a year of unusually strong, stable home value growth across the country but during the second half of the year, appreciation slowed sharply in the priciest corners of the country while it picked up in affordable hotspots.
‘Periods of stability often precede periods of instability, and the outlook for 2019 is certainly both cloudier and blurrier than the outlook a year ago. Housing wealth may have touched new highs this year, but home value gains don’t translate into dollars in the bank account unless home owners opt to sell or borrow against their home,’ he explained.
‘In contrast to previous housing booms, many Americans have been more reluctant in recent years to spend against their home’s worth. Moving toward an uncertain future, that may prove to be a prescient choice,’ he added.