Earlier this month, the National Association of Realtors (NAR) released a list of U.S. metropolitan areas where median home prices rose the most over the last year or so.
Price gains were measured from the second quarter of 2013 to the same period in 2014, and local housing markets were then ranked accordingly. The top two spots went to metro areas in Oregon (Salem and Eugene). You’ll find the full list below.
Top 10 Housing Markets for Price Gains, Q2 2013 – Q2 2014
Notes: The dollar figure by each metro is the current median home price. The percentage shows the increase from Q2 2013 – Q2 2014.
- Salem, OR ($200,400) +24.9%
- Eugene-Springfield, OR ($213,100) +18.1%
- Lansing-East Lansing, MI ($127,700) +17.9%
- Naples-Marco Island, FL ($405,000) +16.8%
- Atlanta-Sandy Springs- Marietta, GA ($166,200) +16%
- Riverside-San Bernardino-Ontario, CA ($274,600) +14.6%
- Sacramento-Arden-Arcade-Roseville, CA ($271,000) +14.3%
- Las Vegas-Paradise, NV ($196,200) +14.2%
- Charlotte-Gastonia-Concord, NC-SC ($203,600) +13%
- Orlando, FL ($182,000) +13%
According to the NAR, the median price for single-family existing homes rose in most of the metro-level real estate markets they track. Prices moved north in 71% of markets during the 12-month tracking period from Q2 2013 to Q2 2014. In this context, the “median” is the midpoint for house prices based on closings. It’s one of several ways to track pricing trends in a particular area.
Driving Factors for Next Year
So what’s in store for the next 12 months? Most housing analysts and economists are predicting a national cool-down, in terms of home prices. Values are expected to continue rising in most cities through next year, but not as much as they have in 2014. This is largely the result of changes on the supply side (inventory).
In many cities across America, supply and demand are normalizing. That is, we are starting to see a better balance between the forces of supply and demand. The severe inventory shortages that lifted home prices in many local markets over the last couple of years could soon be over. Naturally, this is taking some of the steam out of housing appreciation.
There are still a handful of cities where inventory will remain tight in 2015. San Francisco, Stockton, and a few other California housing markets fall into this category. But for the bulk of the country, home buyers will have an easier time finding properties to purchase in 2015.
That’s the supply side. On the demand side, we are seeing signs of growth. A recent report revealed that U.S. housing starts (new construction) rose to an eight-month high in July of this year, signalling strong demand. These and other reports suggest that the U.S. real estate market is back on the road to recovery, after a sluggish end to 2013.
You Shop Locally, So Research Locally
The Home Buying Institute routinely reminds buyers to conduct plenty of research at the local level. The media often report on housing market trends and conditions at the national level. But these reports do little to aid local buyers in assessing market conditions.
This article could just as well have included a list of metro areas where prices dropped the most over the last year. This is evidence of the dramatic difference in real estate trends from one metro area to next, and especially from one region to the next.
Buyers should focus on trends in their own backyards, so to speak. This includes researching home-price movement, supply and demand, sales activity, and recent comparable sales — all within the local housing market. This is the key to making an informed buying decision.