While predictions call for a slight slowdown in the U.S. real estate market this year, Realtor.com still is forecasting that most of the nation’s hottest markets will keep blazing in 2017. And, according to the forecasts, the western U.S. will continue to lead the nation in prices and sales.
“The top 10 markets all benefit from strong growth dynamics: population, jobs and households,” says Jonathan Smoke, Realtor.com’s chief economist, who analyzed the country’s 100 largest metro markets for their growth potential. “They all have low unemployment that’s heading lower, which buoys consumer confidence.”
Western cities account for 11 of the top 25 metro markets on the company’s list, including five in California. But whatever their location, all of the top markets have in common relatively affordable rental prices, low unemployment, and large populations of millennials and baby boomers, along with a high number of listing views on Realtor.com. The top 10 are forecast to see average price gains of 5.8 percent and sales growth of 6.3 percent, exceeding this year’s anticipated national growth of 3.9 percent and 1.9 percent, respectively.
And although the limited availability of homes for sale continues to be a problem for home buyers but a boon to homeowners, these markets are seeing growth in new construction that eases the supply shortage somewhat. Still, there isn’t enough new construction to keep up with the growth, Smoke says—and so prices continue to rise at above-average rates.
However, compared with last year, price growth in eight of the top markets is expected to slow down, with only Los Angeles and Tucson, Ariz., showing bigger increases over last year.
For all their commonalities, the top metro markets have different buying patterns and price levels, Smoke notes. Millennials are more of a buying force in Boston and Los Angeles, while retiring boomers make their presence felt in Phoenix; Jacksonville and Orlando, Fla.; Raleigh, N.C.; Tucson; and Portland, Ore. Veterans, meanwhile, come out in force in Jacksonville and Tucson.
These were the top 20 performing markets in January:
1) San Francisco
2) San Jose, Calif.
3) Vallejo, Calif.
4) Dallas
5) San Diego
6) Sacramento, Calif.
7) Yuba City, Calif.
8) Denver
9) Stockton, Calif.
10) Fresno, Calif.
11) Oxnard, Calif.
12) Columbus, Ohio
13) Colorado Springs, Colo.
14) Nashville, Tenn.
15) Detroit
16) Modesto, Calif.
17) Los Angeles
18) Tampa, Fla.
19) Santa Rosa, Calif.
20) Fort Wayne, Ind.