Auction.com today released its latest look at the top 49 markets for single-family homes and found that Denver, San Antonio, Nashville, Fort Lauderdale, and Dallas lead the pack in terms of rising home prices, affordability, demand, and economic and demographic conditions that pave the way for future demand.
Denver saw a 9.2 percent rise in housing prices compared to last year, while Fort Lauderdale and Dallas each saw prices climb by more than 7 percent. Dallas and San Antonio led the field in home sale growth, each seeing a 5.5 percent uptick since last year.
Auction.com attributes Denver’s robustness to its booming local economy, where employment is more than 4 percent higher than it was a year ago and its population is growing at triple the national average. As a result, the firm reported, home prices have been appreciating at a torrid pace since mid-2012, hitting a record high by the end of Q4. The firm expects housing demand to continue driving up prices in the coming years.
Job growth was also the major factor in San Antonio, Dallas, and Fort Lauderdale, where employment is up similar to Denver’s. Nashville, on the other hand, saw a 6.2 percent growth in home price sales over the past year thanks to a burgeoning tourism economy and a boom in education that has drawn millennials to the city, the report found.
“Earlier in the recovery, most of the growth came from markets that had suffered the biggest declines during the housing bust,” said Rick Sharga EVP at Auction.com. “What we’re seeing today is more in line with fundamental economic trends: markets with the best job growth and population growth are recovering most quickly.”
On the other end of the spectrum, central New Jersey ranked worst, followed by Pittsburgh, Cleveland, St. Louis, and Detroit. For the most part, Sharga told MReport, these markets are experiencing the opposite of the top markets‒‒slow population and job growth leading to fewer home sales. But the bottom markets, he said, are in states in which foreclosures take a long time.
“What you’re seeing is a backlog of distressed homes that have not worked their way through the recovery cycle yet,” he said.
And New Jersey has an added problem‒‒a backlog of distressed homes coupled with very high sticker prices.
The good news is that once the backlog clears, the areas at the bottom of the list will see much better housing growth, Sharga said. And, he cautioned, 49th place on this list “isn’t necessarily that bad. Just in comparison to the top of the list. Recovery could come back in areas on the bottom, but they could still be at the bottom,” he told MReport.