May 9, 2013
10 hottest U.S. housing markets of 2013
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By MarketWatch
After a long and painful downturn in the housing market, home
prices in many—but not all—regions of the U.S. are showing signs of recovery.
According to Zillow, a real estate listing website, home values rose 5.1% across
the U.S. between February 2012 and February 2013. Many local housing markets are
performing considerably better than the country as a whole. Home values rose
more than 13% in 10 of the 30 largest housing markets for which Zillow has data,
and rose more than 20% in five of them. Most of the 10 housing markets on the
list were disproportionately hurt by the housing crisis. However, many of the
areas with the most growth in the past year have remained desirable places to
live. This has helped these areas recover at a faster clip compared with the
rest of the country. Residents have taken advantage of the record-low mortgage
rates and relatively low prices, despite the fact that average home values in
places like San Jose and San Francisco are higher than most of the country. From
24/7
Wall St.’s review of the Zillow data, take a look at the 10 hottest housing
markets 2013:
10. Denver
Change in home value: 13.1%
Current home value: $234,200
Bottom in home value: Q2 2011
Forecast change in home value: 3.1%
The city experienced robust growth in 2012, and this is likely to continue,
according to Zillow. However, between 2013 and 2014, home values are expected to
rise only an additional 3.1%, by far the smallest growth of any housing market
on this list. The Denver market didn't fall as hard as other areas during the
housing collapse. Between the peak in the first quarter of 2006 and the third
quarter of 2012, Denver home prices only fell 5.4%. This February, more than
5,000 homes sold—an increase of 27% from the same month last year.
9. Detroit
Change in home value: 13.1%
Current home value: $84,700
Bottom in home value: Q3 2011
Forecast change in home value: 4.4%
For years, Detroit has been hit by a steep decline in home prices, as well as
continued contraction in the automobile industry. As of the first quarter of
2013, the average home value in the Detroit area was just $84,700, by far the
lowest of all the large metro areas in the country measured by Zillow. Detroit
continues to suffer from high unemployment. The area’s unemployment rate was
11.3% in February, down just slightly from 11.5% a year ago.
8. Los Angeles
Change in home value: 14.9%
Current home value: $439,400
Bottom in home value: Q1 2012
Forecast change in home value: 11.1%
In addition to the nearly 15% growth already experienced in the past year,
home values are expected to rise an additional 11% next year. The growth in the
housing market in California has led to growth in employment as well. The
unemployment rate in the Los Angeles metropolitan area was 10.3%, a significant
improvement from the 11.6% rate a year ago. Between February 2012 and February
2013, the number of people employed in construction rose 7.1%, an indicator of
an improving housing market.
7. Riverside, Calif.
Change in home value: 16.3%
Current home value: $210,100
Bottom in home value: Q1 2012
Forecast change in home value: 17.2%
Like many parts of California, the Riverside metropolitan area is recovering
from the housing bust. Home values are expected to jump 17.2% in the coming
year, more than any other large city in the U.S. that Zillow considered. Like
all other metro areas on this list, the unemployment rate in the Riverside area
also has fallen, but remains comparatively high. The 10.8% unemployment rate in
February was 1.8 percentage points lower than it was in the same month of 2012.
6. San Diego
Change in home value: 17.1%
Current home value: $396,800
Bottom in home value: Q1 2012
Forecast change in home value: 8.8%
Between the market peak in the first quarter of 2006 and the third quarter of
2012, home prices fell 37%. But now home values have rebounded, increasing 17.1%
from the first quarter of 2012 to the first quarter of 2013. This included a
5.5% increase in the past quarter alone. There were 3,769 home sales in February
in the San Diego housing area, an increase of nearly 5% from the same month in
2012. The unemployment rate in San Diego was 8% in February, a significant
improvement over the 9.4% back in 2012.
5. Sacramento, Calif.
Change in home value: 20.1%
Current home value: $241,600
Bottom in home value: Q1 2012
Forecast change in home value: 15.6%
Home prices in Sacramento peaked in the fourth quarter of 2005, earlier than
most metropolitan areas. Between the peak and the third quarter of 2012, home
prices fell a painful 51.5%, which was among the largest drops in the entire
country. Between the first quarter of 2013 and the same quarter in 2014, home
values are expected to rise an additional 15.6%, more than any of the other
largest 30 housing markets except for Riverside. The metro area’s unemployment
rate of 9.6% as of February was still considerably higher than the national rate
of 7.7%.
4. San Francisco
Change in home value: 21.4%
Current home value: $563,200
Bottom in home value: Q1 2012
Forecast change in home value: 10.5%
San Francisco’s home values rose by 21% last year, with 6.4% growth between
the fourth quarter of 2012 and the first quarter of 2013. This was among the
largest quarterly increases of all large metro areas in the country. The median
home value in San Francisco was $563,200 as of the first quarter of 2013. And
the growth in home values is expected to continue—by an additional 10.5% in the
next year. The unemployment rate in the San Francisco metropolitan area was 6%
in February, a significant drop from the 7.5% in the same month last year.
3. San Jose, Calif.
Change in home value: 22.1%
Current home value: $676,100
Bottom in home value: Q3 2009
Forecast change in home value: 9.7%
The housing market in the San Jose metropolitan area bottomed out in the
second quarter of 2009, significantly earlier than the other metro areas on this
list. Since then, home prices have increased a great deal. As of the first
quarter of this year, San Jose’s median home value of $676,100 was more than any
of the other largest metro areas in the country. The unemployment rate in the
San Jose area has declined from 9.2% in February 2012 to just 7.6% in the first
month of 2013. Construction jobs in the area grew by 12.3% from February 2012 to
February 2013, likely a positive sign for the local housing market.
2. Las Vegas
Change in home value: 22.3%
Current home value: $138,800
Bottom in home value: Q1 2012
Forecast change in home value: 7.5%
Las Vegas’s housing market has made a rapid comeback, with home values rising
more than 7% in the most recent quarter alone. While values are on the rise
again, it may take some time for the area to return to prerecession levels.
Between the peak in the first quarter of 2006 and the third quarter of 2012,
home prices plunged a whopping 59%. As the housing market has started to
rebound, jobs have come back as well. Las Vegas’s unemployment rate of 9.8% as
of February—while still considerably higher than the national rate—was a
significant improvement from the 12.1% unemployed in the same month of 2012 and
the high of 14.6% back in July 2010.
1. Phoenix
Change in home value: 24.0%
Current home value: $165,600
Bottom in home value: Q3 2011
Forecast change in home value: 10.6%
No other metropolitan area’s housing market has grown faster than Phoenix,
where home values rose 24% over the past year. Between 2013 and 2014, home
values are projected to rise an additional 10.6%. The unemployment rate in the
Phoenix metro area was just 6.7% in February 2013, down a percentage point from
the same month in 2012. Notably, construction jobs were up 8.2% from the
previous year, likely an indicator of a more robust housing market.
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