Housely
A decade after one of the worst housing market downturns in United States history, the slow recovery has finally caught up and home prices are on the rise. In a recent study conducted by CoreLogic, an analytics and data company, home prices that increased in 371 of 401 United States metropolitan areas, continue to rise. According to Realtor.com, the average home value in 2014 was $188,900. The United States Census has identified 10 United States metropolitan areas with the highest appreciation values that range from 11.4% to 20.5% in single-family home prices within cities that have a population greater than 250,000. Here they are:
San Francisco, California
Demand continues to outstrip one of the most expensive housing markets in the United States for many decades. As the population continues to increase, developers face geographic barriers and regulatory constraints for new construction. As the United States experiences another tech boom home prices are continuing to rise. Inventory is extremely tight and homes sell in less than one month on average. Job growth in the Bay Area ranges from 1.4% to 3.2% while home prices continually increase between 13.4% and 20.5%.
Stockton, California
While unemployment rates in the cities of the Central Valley California are much higher than the coastal cities, traditional buyers have returned. This is especially true in the northern portion of the valley. Many are transplants from the Bay Area in search of more affordable housing. There is a direct correlation between a lower median home price and an increase in sales, despite inventory being tight. Therefore, those looking to sell their home are seeing asking prices jump between 17.3% and 19.6%.
Riverside, California
Rounding out the top three California cities in Riverside; which is experiencing a 15.9% increase in home prices. Located 60 miles east of Los Angeles in the Inland Empire, Riverside is a major hub for distribution. The area continues to grow, even during the housing crisis as there are plenty of distribution jobs and housing is affordable. Due to such a high demand, inventory currently favors the seller.
Warren, Michigan
Situated north of Detroit, Warren, Michigan is bouncing back from the recession with new investments and job growth. This is leading to stronger demand from buyers, limited inventory and homes selling quickly which is increasing home prices by 13.4%.
Boston, Massachusetts
High rents are driving first-time home buyers as well as investors into the housing market. Inventory of homes for sale are falling fast and there is only a 2.1 months’ supply of housing in the Boston real estate market. As a result, in high-end neighborhoods like Cambridge, Charlestown, South Boston, Brookline and downtown Boston, bidding wars have erupted which has driven the sales price up to 5% beyond the asking price. As a result, there has been a 12.5% increase in home prices.
Santa Rosa, California
With an increase in home price of 12.3%, Santa Rosa, California continues to boast a burgeoning grape economy. As one of the gateways to wine country, retail, medical and a variety of other services are popping up to accommodate employees of the grape economy. The job rate growth is higher here than in the Bay Area and investors, move-up buyers and first-time buyers are all driving up demand. With a tight inventory, sellers are enjoying the advantage with only a 3.1 months’ supply.
Santa Barbara, California
Real estate located along the beautiful California coastline is attracting second-home owners and investors. Currently the available inventory is at 4 months’ which favors sellers. The land is expensive, scarce and faces significant regulation so developers will not construct many new residences. As a result, the appreciation on homes is around 12%.
Myrtle Beach, South Carolina
Home prices continue to rise in golf and sunny beach towns like Myrtle Beach. Buyers of vacation homes, investment properties and primary residences actually have the advantage. However, with home values increasing by 11.7%, the appreciation will continue to increase.
Ann Arbor, Michigan
The local economy is primarily driven by the University of Michigan. When drug manufacturer, Pfizer, left in 2007, the housing crash ensued. Luckily, the university aggressively developed real estate for faculty and staff to attract new residents. As a result, housing supply continues to be tight and home values have increased by 11.4% as a result.
Las Vegas
Las Vegas experienced the epitome of the housing bust due to over construction, subprime lending and rampant flipping which was worsened by the recession, foreclosures and unemployment. However, Las Vegas has bounced back with rapid run-ups in one year comparisons. Although supply is currently balanced between buyers and sellers, home prices are increasing at 11.4%.
California is leading the pack in home appreciation with five cities who have limited housing supply, growing populations and job growth. Although the asking prices may be high, most of these cities will provide an excellent return on investment in the years to come.
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