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Everyone loves predicting the future. What awesome surprises will the coming year hold for us in high-profile political scandals or wildly inappropriate workplace behavior? Who’s going to win the Oscars, the Super Bowl, or Miss America (go, Connecticut!). When on earth is the final season of “Game of Thrones” going to start, anyway? But truth be told, we’ve got all of this soothsaying beat by a mile: We’re setting our sights on prognosticating which housing markets will soar to new heights in 2018.
Because you care! Americans breathlessly track the up-and-down trajectory of the nation’s housing markets these days, the way previous generations obsessed over stock prices, NBA rankings, or Furby sales. Give the credit (or blame) to skittishness over the last decade’s housing crash, or the roller-coaster ride of home pricing, or maybe even the ascension of HGTV flipping shows. But real estate matters: The fortunes of cities rise and fall, sometimes quickly, other times in agonizing slo-mo. And the last thing you want to do with the biggest investment of your life is buy into a housing market that is heading in the wrong direction.
What are the hot markets where you can still afford to buy? Which are ones where home prices are almost certain to appreciate? The ones with burgeoning economies and lots of job growth? The ones where you actually want to live?
To determine our predictions for the best real estate markets of 2018, realtor.com’s® economic data team took a look at the number of sales of existing homes and their prices, along with the amount of new home construction in the 100 largest markets. We also analyzed the local economies of each area, along with population trends, unemployment rates, median household incomes, and other factors.
“People are going to continue to seek out pockets of affordability that remain in the market,” says Danielle Hale, chief economist of realtor.com. “A lot of these places are more affordable than surrounding areas, yet still have strong economies. Even though prices are expected to grow, most of these markets will still remain relatively affordable in 2018.”
So which will be the hottest markets in 2018? Be prepared for some surprises.
Top 10 Housing Markets for 2018
Tony Frenzel
1. Las Vegas, NVMedian home price: $285,045
Predicted sales growth: 4.9%
Predicted price growth: 6.9%
Residential Las Vegas neighborhood in view of the Strip
trekandshoot/iStock
The future of Las Vegas is eye-searingly bright—and it’s not just because of all those lights on the Strip.
The economy of the once-downtrodden Sin City is expected to grow about 8.7% in 2018—compared with 6.4% for the rest of the top 100 markets, according to realtor.com. That means a lot of people moving in, moving up, and looking for places to live.
Things weren’t always so rosy. Vegas was devastated by the financial crisis of the late 2000s and the wave of foreclosures that followed.
“We like to say we were ground zero for the Great Recession: We fell further than many other metros,” says Stephen Miller, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “So we had more ground to cover to catch up.”
One of the things drawing folks to settle down and stay in Vegas, long after their 72-hour bender has become a distant memory, is the city’s still striking affordability.
“Our [home] prices are lower than nearly every major Western metro area,” Miller says. “People in California are retiring and selling their houses and moving [in]. … They want a lower cost of living.”
With the influx of new residents and the return of buyers who lost their homes to foreclosures, well-priced homes in good neighborhoods are practically flying off the market, says local real estate broker Bryan Kyle of First Serve Realty. Low interest rates are also luring more buyers.
“What keeps this market as hot as it is right now is the lack of inventory,” Kyle says. Those shortages may be exacerbated by still-underwater homeowners reluctant to plant a For Sale sign in their yard until their equity recovers. But there are fewer of those properties today as prices continue to nudge up.
2. Dallas, TXMedian home price: $339,300
Predicted sales growth: 6%
Predicted price growth: 5.6%
Apartment complex in Dallas
HIgs2006/iStock
This oil town is pumping, thanks to a steady flow of companies relocating, expanding, or opening up in the region. Those firms are attracted to the low taxes and cost of living. And that’s brought busloads and planes filled with new residents searching for For Sale signs.
For example, Toyota recently moved its North American headquarters to nearby Plano—and asked about 4,000 of its California, Kentucky, and New York employees to come along for the ride. Those transplants and their families all need roofs over their heads.
“Most of the houses that are being sold right now are new-built, and the builders can’t keep up,” says Yolanda Dittmar, a local real estate broker at Dittmar Realty. With the rising prices, existing homeowners are reluctant to part with their abodes and trade up.
“It’s going to cost them a lot more money to sell their house and buy another in the same area they’re living in,” she says.
Existing homes in good shape in good neighborhoods will set buyers back about $500,000 in the city limits, she says. New homes run between $700,000 and $2 million. In the suburbs, they’re a bit less, about $350,000 for an existing abode and over $400,000 for a new one.
However, prices are beginning to dip about 10% to 15% for a mid-priced residence, she says. Simple reason: Some of these properties may have been overpriced.
3. Deltona, FLMedian home price: $275,050
Predicted sales growth: 5.5%
Predicted price growth: 6%
Deltona’s location, sandwiched about 30 minutes between Orlando and Daytona Beach, is tough to beat.
In fact, many folks work in Orlando and commute from Deltona, where prices are still significantly cheaper. The median home price in Deltona’s city limits (as opposed to the greater metro area referenced by the figure above) is $159,000, according to realtor.com data, vs. $269,000 in Orlando.
The city is still clawing its way back from the recession. The metro’s economy is expected to grow about 8.3%, while employment is to increase by about 2.9%, according to realtor.com.
Investors have helped boost this market. When prices were their lowest, they scooped up whatever single-family houses they could get deals on, fixed and flipped them, or rented them out. More of those redone rentals are now going on the market, says Stephanie Agosto, a local real estate agent at NextHome Professionals. Those homes, with their many renovations, are selling at a premium.
But it’s only in the past year or so that Agosto has seen prices begin to rise.
“You can still get more for your money in Deltona,” she says.
4. Stockton, CAMedian home price: $385,050
Predicted sales growth: 4.6%
Predicted price growth: 6.4%
Waterfront in Stockton, CA
tntemerson/iStock
Crime-plagued Stockton, far from the California coast, doesn’t exactly have the best rep. It’s not known for being an economic powerhouse. But it’s becoming the place to be.
Buyers can get score a home in Stockton proper for a median $285,000—less than a quarter of what they’d pay in San Francisco, about an hour-and-a-half away. (The median price in SF is a head-spinning $1.3 nmillion.) Priced-out Bay Area denizens are moving in for deals like this four-bedroom, two-bathroom fixer-upper for $250,000.
“Stockton is going through a revitalization,” says Jerry Patterson, a real estate at Cornerstone Real Estate. Many of the downtown’s historic buildings are being restored, and new neighborhoods are in development. “Stockton has a lot to offer, and it’s very reasonably priced.”
The area is also helped by its proximity to vineyards, near Lodi. Homes typically receive multiple offers, and the best of the bunch sell within just a few days.
“It’s pretty competitive,” Patterson says.
5. Lakeland, FLMedian home price: $224,950
Predicted sales growth: 3%
Predicted price growth: 7%
View of downtown Lakeland, FL
RobHainer/iStock
Like Deltona, Lakeland’s allure lies in its location. It’s about 40 minutes east of Tampa and an hour southwest of Orlando, making it a desirable place to be for cost-conscious commuters.
The city’s now growing, with a downtown revival and new subdivisions going up outside of the city. What a difference a few years can make: Lakeland, like many other metros on this list, was clobbered by the financial crisis.
“During the recession, there were a lot of [vacant storefronts,]” says Michelle Schaal, a local real estate agent at Keller Williams Realty. But now, she adds, the city is “starting to revitalize a lot of the old buildings on the major thoroughfares. It’s opening it up for more small businesses to move in.”
“We have a lot of fine dining restaurants, things that didn’t exist before,” she says.
These new amenities, along with lower prices, have been a draw for home buyers. In Lakeland’s city limits, the median home price is $180,000. There are also down payment-assistance programs in the area for qualified buyers that have helped to give the market a boost.
“Mostly, it’s people transferring because of job opportunities and downsizing,” she says of her clients. “Millennials are [also] starting to purchase in a big way.”
6. Salt Lake City, UTMedian home price: $360,828
Predicted sales growth: 4.6%
Predicted price growth: 4.5%
Residential neighborhood in Salt Lake City
fotoVoyager/iStock
Salt Lake City is so hot that potential home buyers will likely need to duke it out with competitors.
Buyers in the city, which entered the global spotlight in 2002 when it hosted the Olympic Games, are now offering 20% to 25% above the asking price, says Kenny Parcell, real estate broker at Equity Real Estate Utah.
“You’re seeing people who are tired of paying higher taxes, or they’re tired of dealing with traffic and congestion [elsewhere]. They can sell their house in Silicon Valley and get four times the house in Salt Lake or the surrounding suburbs,” Parcell says. “We have a lot of corporations coming in, which means good-paying jobs, a good tax base, and good schools.”
Many of his clients are college students who stick around after graduation or who move back to the area after working elsewhere for a few years.
7. Charlotte, NCMedian home price: $325.045
Predicted sales growth: 6%
Predicted price growth: 3%
Similar to Dallas, much of the boom in Charlotte’s housing market is thanks to all of the out-of-staters moving in. Many of them are relocating for work, as Charlotte is a big financial hub. Others are coming there to retire, attracted by the low cost of living.
“A lot of people are wanting to move here,” says Scott Hartis, a local real estate broker with Keller Williams Realty. “We have a great climate, strong business tax incentives.”
Employment is expected to grow about 2.5% in 2018, while the population will shoot up 2.2%, predicts realtor.com’s economic team. Continued growth has made buying a home challenging.
“Sometimes properties are going under contract within a matter of hours, with multiple offers,” Harris says.
8. Colorado Springs, COMedian home price: $375,000
Predicted sales growth: 3.1%
Predicted price growth: 5.7%
Residential area with view of Garden of the Gods in Colorado Springs
SWKrullImaging/iStock
Home prices aren’t the only thing in Colorado Springs getting higher and higher. The entire state’s economy has been getting a buzz since Colorado legalized recreational marijuana in 2012. And the prices show no signs of coming down.
“I’ve met a lot of people who moved here for the marijuana,” says local real estate agent Monique Allison-Vollmer of Williams Partners. “That’s put our rental market in demand too.”
The city’s proximity to Denver, about 70 miles away, has also been a boon to its economy. Folks can work in the state capital and live in Colorado Springs for a fraction of the cost. The median price in the Denver area is $511,200—about 36% more. Builders have been capitalizing on that.
“There’s a lot of new construction,” says Allison-Vollmer. Over the summer, she would receive four to six offers per property, with offers promising $10,000 to $25,000 over the asking price. But it’s slowed down considerably since then, with prices falling just a little.
“People only make so much money,” she says.
9. Nashville, TNMedian home price: $358,501
Predicted sales growth: 1%
Predicted price growth: 7.7%
Things are looking up in Nashville.
JodiJacobson/iStock
The headlines coming out of Nashville these days have little to do with which country music star dumped whom. The area has become the “It” city for the far-less famous as of late. And that’s pushing home prices to new heights.
List prices skyrocketed 89% in the last five years. Prices jumped 10.8% just this year. And the population is also rising, as more folks are moving in.
“It’s crazy,” says Lisa Peebles-Chagnon, an affiliate broker at Benchmark Realty in Nashville. Single-family homes in the best suburbs of Nashville can go for multiple offers above asking—”overnight,” she says. But homes with ambitiously high price tags are sitting on the market longer.
“We have a lot of cranes dotting the landscape. We’re joking that it’s the state bird of Tennessee,” Peebles-Chagnon says of all of the city’s new construction.
10. Tulsa, OKMedian home price: $199,586
Predicted sales growth: 7.5%
Predicted price growth: 1%
2018 looks bright for Tulsa, OK.
digidreamgrafix/iStock
Those who dream of owning a home but have limited means shouldn’t overlook Tulsa. The Oklahoma city is the most affordable on our list, with a median price well below the nearly $275,000 national average.
Buyers can score gems like this three-bedroom, 1.5 bathroom, single-family home for a whopping … $99,900. Or they can snap up this three-bedroom, two-bathroom condo for just $72,000.
The local economy is expected to increase by an impressive 7%, but employment will only rise by a measly 0.2%, according to realtor.com predictions. Rising sale prices, growing about 10.3% in the first eight months of this year, are what helped to put this metro on the list.
“It’s just a good place to live, with low crime, low cost of living, steady job availability,” says Jake Salyer, a local real estate agent with Keller Williams Preferred.
Most of his clients are older millennials and Generation Xers with families buying up homes, particularly in the suburbs. Folks can score a single-family house in a nice subdivision for far less than $250,000—without having to contend with bidding wars and multiple offers well over asking.
“It’s simply not that kind of market,” Salyer says.
The post The New Gold Standard: 10 U.S. Housing Markets That Will Rule 2018 appeared first on Real Estate News & Insights | realtor.com®.
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