Dive Brief:
- Cities in Texas accounted for half of the top 10 housing markets gearing up for price jumps this year, with two metros in Colorado also making the list, according to a report from personal finance company SmartAsset.
- Midland, TX, led the list, which was based on median home values, median incomes and the difference in population and housing levels. Home values there surged 23% from 2011 to 2015 as its population jumped 12.78% while the number of new housing units rose just 5.71%.
- Denver took the No. 2 spot, followed by Midland neighbor Odessa, TX. Washington, DC, and New Orleans rounded out the top five spots.
Dive Insight:
SmartAsset’s report compares with recent data showing that home-value appreciation is picking up across the U.S. South and areas of the Midwest while it tapers in West Coast metros that saw double-digit price growth over the last few years.
Last month, real estate listing website Zillow identified Nashville, TN, as the leading metro for home price increases nationwide, followed by Portland, OR, Tampa, FL, Dallas–Fort Worth, TX, and Orlando, FL, which all reported year-over-year growth of more than 10%.
One driver of the new growth in these markets is corporate relocations and generally strong job markets drawing residents, though fewer Americans are moving now than in previous years. Another factor is the broader economic recovery from the recession that has imbued some markets with renewed internal growth. Together, these factors are slowly ratcheting up pressure on for-sale housing inventory, raising prices.
A report by NerdWallet in December placed Austin, TX, Denver, Nashville, and Durham, NC, among the 10 most-affordable cities that also offered high-paying jobs. Moreover, Bankrate reported earlier this month that states in the West and Midwest lead for first-time buyers based on affordability, employment, inventory conditions and credit availability.
The result is more demand for housing that builders may not yet be able to get in the ground fast enough. Builders cite lot and regulatory costs as adding time and money to projects, while a shortage of skilled labor in markets nationwide has builders hesitant to gear up to meet that demand too quickly.