By any measure, the housing market went bonkers last year. Now, Zillow has put a number on it.
The company calculated that the nation’s housing stock gained $6.9 trillion in value in 2021, almost doubling the previous record increase of $3.7 trillion in 2005. According to the analysis, the total value reached $43.4 trillion.
“Even in the context of a year in which several housing records were topped, the scale of the housing market’s growth in 2021 is eye-popping,” said Zillow senior economist Jeff Tucker.
The market’s value has more than doubled since the Great Recession. Last year, home values grew by a record 19.6 percent, according to Zillow.
The gain was concentrated at the top of the market. The top third of homes is worth almost five times as much as the bottom third, and makes up 61 percent of total market value. The bottom third accounts for only 13 percent.
Geographic differences are stark. California accounts for more than a fifth of the nation’s housing value, 21.3 percent. Its stock increased last year by $1.4 trillion to $9.2 trillion, which is more than homes in the bottom 30 states combined are worth, according to Zillow. New York ranks second in value, followed by Florida and Texas.
Florida’s share of the U.S. market increased to 6.4 percent from 6 percent — among the largest gains of any state. Its homes are collectively worth $2.7 trillion, as are those of Texas, whose share rose to 6.1 percent from 5.9 percent.
No state slipped more than New York. Its market share dropped to 7.3 percent from 7.8 percent, in part because the state had the largest population drop. The Empire State’s housing stock is still worth almost $3.2 trillion.
The New York metro area, which includes parts of New Jersey, has the most valuable housing market at $3.5 trillion. Los Angeles is nipping at its heels, though, at $3.3 trillion, and its $431 billion gain in 2021 was the largest of any metro. The San Francisco housing market ranked third at $2 trillion.
While sellers are popping bubbly over the soaring home values, young families are suffering the consequences, Tucker said.
“Skyrocketing home values may be celebrated by longtime homeowners, but are daunting for those trying to buy their first home,” said the economist. “This year is likely to be less competitive for buyers, but it will continue to be a sellers’ market.”