The total value of every home in the U.S. is $33.6 trillion, nearly as much as the GDP of the two largest global economies combined – the U.S. ($20.5 trillion) and China ($13.6 trillion) – according to a new Zillow analysis.
Since
2010, when the market was battling to regain its footing in the wake
of one of the largest housing downturns on record, the national
housing market added $11.3 trillion in value, which is a more than
50% increase. About 14% of that gain was from new stock entering the
market, with the remainder from increased values of the existing
stock, underlining just how much home values rose during last
decade’s recovery and then explosion.
California
lives up to its Golden State nickname, making up a whopping 21.2% of
the nation’s housing value with 12% of the population. To put that
into context, the next most populous state, Texas, makes up 8.8% of
the U.S. population, but only 5.9% of the country’s housing value. To
exceed the $7.1 trillion worth of homes in California, you’d need to
combine the next four states on the list – New York ($2.7 trillion),
Florida ($2 trillion), Texas ($2 trillion) and Washington ($1.1
trillion).
With
$66 billion each, North Dakota and Wyoming have the smallest shares
of the U.S. housing market.
At
a more local level, three metros are beyond the trillion-dollar
barrier – New York ($3.2 trillion) Los Angeles ($2.5 trillion) and
San Francisco ($1.6 trillion). Los Angeles was the only market to add
more than a trillion dollars of housing during the 2010s, adding $1.1
trillion. Three of the five metros that gained the most value were in
California, as San Francisco ($827 billion), New York ($657 billion),
San Jose ($360 billion) and Seattle ($356 billion) followed Los
Angeles at the top.
While
California cast the biggest shadow in the nation’s housing growth for
most of the decade, more recent trends paint a different picture. The
typical home value in California was growing at more than 20%
annually for a period between the end of 2013 and early 2014, an
incredibly rapid pace, but one that is also unsustainable. By the end
of the decade, annual appreciation in California had slowed to less
than 2%, allowing Texas to surpass it as the top contributor to the
growth in value of the U.S. housing stock – total housing in Texas
grew $89 billion over 2019, compared to $77 billion in California.
At
the metro level, Washington, D.C. ($38 billion), Phoenix ($30
billion) and Seattle ($30 billion) have added the most value since
the end of 2018. Two large metros lost value over this period – San
Jose, down $49 billion, and New York, down $46 billion.
“In
2010, Americans were grappling with falling home values, unsold
subdivisions, and sky-high foreclosure rates, while policymakers were
working to stimulate demand,” said Zillow Economist Jeff Tucker.
“A decade later, we’re facing a very different set of
challenges, as a persistent shortage of new homes and starter homes
has kept home prices rising out of reach for many would-be first-time
home buyers. More and more of the nation’s wealth is now tied up in
our homes, as workers in some of the world’s most economically
productive cities, such as San Francisco, San Jose and Seattle, have
raced to get a foothold in homeownership there, driving up prices
with their fierce competition. Most of this growth has come from
rising prices for the same homes, not from actually building more
homes, a troubling trend when it comes to affordability.”
In
the vast majority of the country, home value appreciation accounted
for most of the growth in the total value of the housing stock last
decade, including 86% of the growth nationally. However, two
fast-growing markets, Charlotte and Austin, saw a greater share of
growth come from new homes. That’s not to say that home value growth
was slow in these markets – home values have outpaced the national
average in both Charlotte and Austin since 2010 – but the rate of new
construction has been so great as to exceed that growth.
Source: realtybiznews.com