Where will the hottest markets be as we move into the busy spring homebuying season?
Ten-X, formerly Auction.com, released its report on the top single-family housing markets this winter, which ranks the nation’s 50 largest housing markets according to current and forecasted housing fundamentals.
According to the list, these markets had the best combination of rising home prices, favorable affordability and strong housing demand, combined with strong economic and demographic conditions that point to future demand.
“The U.S. housing market recovery continues to be supported by underlying economic fundamentals, particularly the improved labor market,” said Ten-X Chief Economist Peter Muoio.
“Though new regulatory procedures induced some volatility in late 2015, home sales continued at a healthy pace, and while a tight inventory of homes constrained improvement in sales, it has contributed to accelerated gains in home prices,” added Muoio.
Of the five markets highlighted in Ten-X's Winter 2015 single-family market rankings, only Las Vegas is new to the top five, making a sizable leap from 20th place to fifth place. The top three — Seattle, Fort Lauderdale, and Orlando — remain unchanged, while Portland inched ahead one spot from fifth place to fourth place.
“The fact that Las Vegas – ground zero during the foreclosure crisis – has climbed back to become one of the five hottest markets in the country tells you just how far we’ve come in terms of a housing recovery,” said Ten-X Chief Marketing Officer Rick Sharga.
“Destination cities like Las Vegas, Fort Lauderdale, and Orlando are benefitting from low oil prices, which increase leisure and hospitality business, and in turn boosts employment and home prices. We expect the housing recovery to see some choppiness, but generally continue building on its current momentum.”
Here are the top five hottest single-family housing markets:
5. Las Vegas, Nevada
Due to its year-round leisure/hospitality industry and a 2% increase in employment year-over-year, Las Vegas moved up from 20th place to fifth. Las Vegas’ existing home prices are up 8.3%, and up 22.6% in home sales, which is the strongest gain among the top 50 U.S. housing markets. Las Vegas’ population growth accelerated to 2% according to the most recent data.
4. Portland, Oregon
At fourth place, scorching job growth in Portland’s professional/business services sector has topped 7% year-over-year with payrolls at an all-time high at more than 20% above their prior peak.
Home prices have increased in each of the past 14 quarters and are up nearly 12% over the past year. Home sales have experienced nearly identical growth, currently standing 11.2% higher than a year ago.
3. Orlando, Florida
With oil prices at nearly $30 a barrel, Disney World-bound tourists are aiding in the city’s expansion. Orlando’s employment is up 3.8% over the past year. Orlando's home prices grew 11.2%, while home sales growth increased 8.9%. Orlando’s population grew 2.2% in 2014, the third strongest increase among the top 50 U.S. markets, providing strong support for housing demand and boosting the single-family market.
2. Fort Lauderdale, Florida
Even though population growth has slowed down, the metro’s solid demographic performance continues to support economic expansion and housing demand throughout Broward County. The city's leisure/hospitality sector has fueled job growth and its large professional/business sector is also rolling, growing more than 7.5% over the past year. Home prices were most recently up 8.9% from their year-ago level, though remain a notable 22% lower than their pre-bust peak. Home sales are up 7.9% from a year ago.
1. Seattle, Washington
In first place, Seattle reached a new peak as home-prices increased 12.3%. Seattle’s home sales prices came in strong at 9.4%, which is higher than a year ago. Employment keeps hitting all-time highs thanks to the information sector posting year-over-year gains of 5% and metro payrolls, which rose 3% over the past year, now measuring more than 7.5% higher than their previous peak. The report says that demographics remain highly supportive of future growth, as population growth has been more than doubling the U.S. rate since 2011, which will buttress demand and put upward pressure on prices in the long run.