Summary: This story focuses on some of the hottest housing markets in the country, when measured by home prices. The five housing markets listed below have experienced annual price gains of 20% or more, over the last year.
Historically, U.S. home prices rise by about 3% each year. Except during a boom or bust, of course. But a handful of housing markets are bucking this trend. There are five cities, in particular, where home prices have risen by 20% or more in the last year. This is according to Zillow’s proprietary House Value Index (ZHVI).
Here’s what we know about these five hottest housing markets:
Phoenix, Arizona +24%
The harder they fall, the faster they rise. This is true for Phoenix, Arizona, as well as the other four housing markets on this list. It’s one of several factors they share in common. All of these cities were hit especially hard during the economic crisis. Now they are outpacing the rest of the country in terms of home-price appreciation.
According to Zillow, house values in the Phoenix metro area have risen 24% over the last year or so. Phoenix also posted the largest annual price gain of any city in the latest release of the Case-Shiller home price index. Prices were up 23% according to that report.
Las Vegas, Nevada +22.3%
According to Zillow, home prices in the Las Vegas metro-area housing market have risen 22.3%, year-over-year.
Here we have another city that got pummeled during the housing crisis. Las Vegas could have been renamed ‘ForeclosureVille’ in 2009. And while it still has one of the highest foreclosure rates in the country (#4 among U.S. cities, according to RealtyTrac), housing demand has risen enough to absorb the excess inventory.
Consider the evidence. According to the monthly housing summary conducted by Realtor.com, the total number of real estate listings in the Las Vegas area has declined by 23% over the last year. The median list price shot up by 23% (coincidentally) during the same 12-month period. This market is rebounding in spite of its relatively high foreclosure rate.
San Jose, California +22.1%
Can you show me the way to San Jose? I’ve heard it’s a booming housing market right now. The same goes for the broader Silicon Valley, as well.
According to San Diego-based DataQuick, a company that compiles and sells housing-related data, home prices in Santa Clara County have risen 13 months in a row. The median sales price for the county rose 27% from March 2012 to March 2013.
Zillow reports a year-over-year gain of 22.1% for San Jose metro-area home prices.
San Francisco, California +21.4%
In January, I outlined the top seven housing trends for San Francisco, California. Two of them had to do with inventory and home prices. Inventory has plummeted in this housing market over the last couple of years, while house values have skyrocketed. And guess what? Those trends are still going strong today.
Here are the latest pricing trends provided by leading researchers:
- Zillow House Value Index: San Francisco metro-area home prices are up 21.4% YOY.
- DataQuick: The median sales price for San Francisco County has risen 25.8% YOY.
- Case-Shiller: Average home prices in the metro area rose 18.9% from February 2012 to February 2013.
Sacramento, California +20.1%
We have seen some dramatic changes in this housing market. Inventory decline is one of the biggest stories. Realtor.com currently ranks Sacramento #2 among 146 metro areas, in terms of inventory reduction. Over the last year or so, the total number of listings in this market has declined by a staggering 63%. Home buyers there are facing increased competition for a limited number of homes.
According to Zillow, house values in and around the California state capital have risen by 20.1% in the last 12 months.
So there you have it, the 20% club, five hot housing markets where home prices have risen by 20% or more over the last year.