Home prices across the United States have risen substantially over the past year and a half. The coronavirus pandemic actually accelerated this trend, by giving a lot of people a new incentive to relocate and purchase houses.
This, combined with low inventory levels, put tremendous upward pressure on house values.
But this trend has not been even across the board. Some cities and states have experienced much greater home price growth compared to others.
A recent report from the property data company CoreLogic revealed the five states with the biggest home price gains in 2021. Idaho, Arizona, Montana, Utah and Washington topped the list in terms of year-over-year price growth.
Biggest Home Price Gains: Idaho, Arizona, Montana
In August 2021, the property data and analytics company CoreLogic published a report that showed home price trends in the U.S. Specifically, the report showed how much house values rose between June 2020 and June 2021.
In a handful of U.S. states, home prices rose by more than 20% during that 12-month timeframe. That’s miles above historical averages for the past few decades. The top-performing states included Idaho, Arizona, Montana, Utah and Washington.
Nationally, home prices rose by 17.2% from June 2020 to June 2021. That too was well above historical trends, and a sign of overheated housing markets.
According to Frank Martell, President and CEO of CoreLogic:
“Home prices have been rising in the mid-single digits for some years now. The recent surge to double-digit price jumps reflect the convergence of exceptional demand and persistent low supply. With plenty of cash on the sidelines, along with very low mortgage rates, prices are heading up and affordability will become a more acute issue for the foreseeable future.”
Here are the five states that posted the biggest home price increases, during the 12-month period mentioned earlier:
- Idaho (34.2%)
- Arizona (26.1%)
- Montana (24.3%)
- Utah (23.4%)
- Washington (21.6%)
Housing Market Spotlight: Boise, Phoenix, Salt Lake City
Over the past 15 months or so, many people have left crowded cities with high-priced real estate markets in favor of open spaces with more affordable homes. We’ve seen a surge of relocation into cities like Boise, Idaho and Phoenix, Arizona — among others.
That trend has increased competition among buyers, while depleting an already limited inventory situation. It also has a lot to do with the five states listed above, with the biggest home price gains in 2021.
Housing markets like Boise, Phoenix and Salt Lake City have seen explosive growth over the past year or so. In these hot real estate markets, supply levels are hovering at historically low levels.
The short version is that there aren’t nearly enough homes on the market to satisfy the demand from buyers. This puts steady upward pressure on prices, as evidenced by the data below.
Here’s a look at home price trends in these three metro areas:
The Boise metro area — which includes the cities of Caldwell, Meridian and Napa — has experienced a flood of home buyers relocating from other areas. As a result, prices have risen in meteoric fashion.
According to the real estate data company Zillow, the median home value for the Boise metro area rose by a whopping 44% over the past year. Looking forward, they issued a double-digit forecast for the Boise housing market extending into 2022. The company predicted that home prices in the area would rise by around 18% over the next 12 months.
The median price stood at $481,000 as of early September 2021.
The Phoenix-Mesa-Scottsdale metropolitan area has mirrored the pattern mentioned above — to a lesser degree.
According to Zillow, the median home value within the Phoenix-area housing market rose by nearly 30% in the past 12 months. Their long-range forecast predicted that prices in the area would rise by 15% over the next year.
The median value for this metropolitan real estate market was $391,000 in September.
Salt Lake City, Utah
Here again, we have a combination of steady population growth and limited supply within the local real estate market. And it’s boosting house values like never before.
The Salt Lake City metro area housing market has experienced significant home price gains during 2021. The median value rose by around 26% over the past year. Zillow offered a forecast of 15% growth over the next 12 months.
The median home price in Salt Lake City rose above $500,000 earlier this year, for the first time ever.
All three of the real estate markets above — and others like them — have several things in common. We’ve touched on most of these factors already.
These hot housing markets have seen a significant influx of residents relocating from other areas. There has also been an increase in home-buying activity among local residents. As a result, an already tight inventory situation has become even more constrained.
You don’t have to be an economist to connect the dots here. When a lot of people want to buy a house in a particular area, but there aren’t enough properties to meet that demand, home prices tend to rise. The more extreme the imbalance, the greater the price growth.