Homes are worth more than they have ever been before in more than a quarter of United States housing markets — and Boston is no exception.
A new Zillow report points out that Boston metro area home values have appreciated 5.9 percent in the last year, bringing the February 2016 Zillow Home Value Index to $387,400. This breaks Boston’s previous bubble-era median home value record from September 2005, which was $384,900.
These record prices indicate that many markets are now close to a full recovery from the burst of the housing bubble.
“These new records mean we’re no longer making up ground lost during the housing recession — we’re laying a new path forward, based on demand for housing and economic growth throughout the economy,” Zillow Chief Economist Dr. Svenja Gudell said in a statement. “In some markets, these new highs are a return to normalcy. The fact that other markets are still off by double digits may not mean those markets are far from being recovered. It just highlights how extraordinarily inflated home values had been during the housing bubble.”
Despite the climb in prices, real estate experts surveyed last fall were not concerned about Boston entering another housing bubble. They did fear cities like San Francisco, Seattle, San Diego, and Los Angeles could approach another bubble.
Though Boston may not reach a bubble, it has another problem — the housing stock is very low. Zillow reported that there are 3.9 percent less homes available than there were a year ago. And on top of that, we already know that vacancy rates in the greater Boston area in June 2015 were at 0.7 percent, which is lower than any time since 2004 and lower than all other U.S. metro areas.
Boston renters saw similar price increases last year, as rent appreciated 5.4 percent, bringing the Zillow Rent Index to $2,250.