The housing market has been closely watched since the recession, as it has recovered unevenly throughout the country, but these 10 markets are expected to be hot in 2014.
The housing market has been closely watched since the recession, as it has recovered unevenly throughout the country — high foreclosures remain in some cities, while others can’t keep up with demand.
Economic and investment predictions for 2014 are mostly positive (surprisingly, so), and real estate is included. Trulia recently found in a survey that 74% of Americans consider homeownership part of their personal American Dream, which is the highest level since January 2010. In fact, even 73% of 18- to 34-year-olds said so, which is up from 65% in August 2011.
While the housing market has seen rising prices over the past two years — good news for homeowners — there’s still plenty of troublesome data.
“At the same time, the effects of the recession and housing bust still sting: the barriers to homeownership remain high, and a few markets — mostly in Florida — still have a foreclosure overhang,” wrote Trulia’s chief economist, Jed Kolko. “Plus, the housing recovery itself brings its own challenges, including declining affordability and localized bubble worries, especially in southern California.”
Trulia is expecting that housing affordability will worsen in 2014 as buying a home will be more expensive than it was this year. Not only will home prices will rise faster than income and rent, but mortgage rates will be higher. However, there will be more inventory next year, partly because of new construction, but mostly because higher prices mean homeowners will look to sell.
Considering the high expectations for real estate in 2014, Trulia has come up with its top 10 markets to watch. The list is missing some high-profile markets, because they are overvalued right now. Markets with large foreclosure inventory were also excluded — Florida doesn’t make the list at all. While Florida doesn’t make the list, North Carolina and Oklahoma both have two entries.
The cities are listed by the increase in construction permits since 1990.
10. Salt Lake City, Utah
Population: 189,314 (2012)
Job growth: 2.4%
Construction permits since 1990: 80%
Average listing price: $365,986
In the last month, home prices in Salt Lake City have increased 2.4%, according to Trulia’s data. Even better, as of August, the unemployment rate is at 4.3%, below the state’s average of 4.7%.
9. Forth Worth, Texas
Population: 777,992 (2012)
Job growth: 3.5%
Construction permits since 1990: 83%
Average listing price: $246,530
Museum of Modern Art. Photo by Joe Mabel
Fort Worth’s unemployment (6.2%) is slightly lower than nearby Dallas (6.5%) and the state overall (6.4%). Plus, Texas’ other population cities, Austin and Houston, are considered overvalued right now.
8. Charlotte, North Carolina
Population: 775,202 (2012)
Job growth: 3.3%
Construction permits since 1990: 86%
Average listing price: $304,780
The Charlotte unemployment rate (7.6%) is actually worse than the last reported for the country overall (7.3%), although it had the second-highest job growth on the list (behind Fort Worth).
7. Bethesda-Rockville-Frederick, Maryland
Population: 190,484 (2012)
Job growth: 2.2%
Construction permits since 1990: 92%
Average listing price: ~
Bethesda. Photo by G. Edward Johnson
The home prices in these three towns are very different. In Frederick the average listing price is $341,136; in Rockville it’s $537,788; and in Bethesda it’s $1.3 million. The unemployment rate for the market is very good, though, at just 4.9% in September, according to the latest Bureau of Labor Statistics. In 2000, when the country was last at full employment, the unemployment rate was 4%.
6. Denver, Colorado
Population: 634,265 (2012)
Job growth: 2.6%
Construction permits since 1990: 94%
Average listing price: $449,813
Civic Center in downtown
Despite the average listing price, the median sales price in Denver is really $252,602, according to Trulia’s data, which is a decline of 6.4% from the previous quarter, but still a 1.9% increase over the previous year.
5. Raleigh, North Carolina
Population: 423,179 (2012)
Job growth: 2.1%
Construction permits since 1990: 99%
Average listing price: $352,345
The average listing price in Raleigh is up 5.7% in just the last month, according to Trulia. The city’s unemployment rate (7.6%) is well below both the state overall and eighth-place Charlotte.
4. Seattle, Washington
Population: 634,535 (2012)
Job growth: 2.5%
Construction permits since 1990: 99%
Average listing price: $698,574
Photo by Patrick Rodriguez
Over the last five years, sales prices have appreciated 9.6% in Seattle. At the beginning of the year, real estate company Redfin had named Seattle’s North Maple Leaf neighborhood one of the top up-and-coming neighborhoods.
3. Tulsa, Oklahoma
Population: 393,987 (2012)
Job growth: 2%
Construction permits since 1990: 100%
Average listing price: $212,850
© Caleb Long
The state is often called one of the best states to make a living because of its low cost of living, strong job market (unemployment is just 4.9%) and inexpensive housing.
2. Nashville, Tennessee
Job growth: 2.8%
Construction permits since 1990: 103%
Average listing price: $395,894
Printer’s Alley in downtown.
Over the last five years sales prices in Nashville have appreciated 17.7% and its average listing price is up 5% from a month ago.
1. Oklahoma City, Oklahoma
Job growth: 2.3%
Construction permits since 1990: 142%
Average listing price: $199,630
Oklahoma City is particularly desirable if you’re a retiree or getting close to retirement, according to Forbes and NerdWallet rankings. And if you’re still working, then Oklahoma City has the lowest unemployment rate on the list at 4.7%.