What Were The Top Real Estate Markets for 2017?
Now that we embark on 2018, its a good time to look back and review what happened in real estate for 2017. As a whole, real estate flourished in 2017, spurred by low mortgage interest rates, high demand and a relatively low supply of homes on the market. Although 2017 was a good year for just about everyone, what were the hottest real estate markets for 2017?
Back in January of 2017, Trulia released their list of the 10 hottest real estate markets to watch for 2017. Around the same time, Zillow released their hottest real estate markets for 2017. Although Zillow owns Trulia, the lists were quite different. There was one consistency between the two lists — both were full of coastal real estate markets. Realtor.com consistently puts out their list of the top real estate markets too. It is easy to come up with different lists for the top real estate markets – it depends on which real estate statistics you choose to look at and how you weight them. When reviewing real estate market statistics, there are many data points that can be reviewed, including:
- Number of home sales
- Increase in the number of home sale year over year
- Home prices
- Increase in home prices year over year
- Dollar per square foot for single family homes
- Dollar per square foot increase year over year
- Number of new construction
- Increase, year over year, of new construction
- local economic factors
- population trends
- Median home prices
- Year over year increase in median home prices
- Absorption rate of homes
- Months of supply of home
- and much more…
And then, of course, are you looking at every city in the country? Are you just looking at the top 100 real estate markets by size? Top 200? Most entities that are putting together a list of the the top real estate markets then have to choose what weight to give to each data point. It becomes easy to see how everyone can come up with a different list.
What Were The Real Estate Predictions for 2017?
The Top Real Estate Markets for 2017
Coastal Areas seem to dominate the top real estate markets for 2017 with ***** of the top ten being coastal real estate markets, with California making up the top three spots. The ongoing growth of the California real estate market insures that you will have no problem finding a real estate agent there – with 1 in 7 of California residents having a real estate license.
San Francisco CA
The area of San Francisco-Oakland-Hayward has seen tremendous real estate growth. That is saying quite a lot considering the real estate prices in San Francisco have not been depressed by any stretch of the imagination. This is one of those unique areas that already had home prices that were much higher than the rest of the country – but somehow seemed to still see tremendous increases. Home prices in the San Francisco Bay area jumped 7 percent annually in November of 2017. That makes the third straight month at such dramatic increases in home values. The rate of increase was far stronger than the increase in home prices for the first half of 2017. Low supply and high demand are some of the factors attributed to the major gains.
Sacramento, much like San Francisco, already had much higher than average home prices. To see the real estate market grow at such a rate is extremely unusual. With the commercial real estate market on fire in Sacramento, we have seen the residential market follow. The Sacramento Association of Realtors recorded 1.6 months of inventory this November, meaning that’s about how long it would take to sell all of the resale homes on the market in Sacramento County and the city of West Sacramento.
Although still recovering from the massive downturn, in the last few months of 2017 the Lodi California real estate market has experienced significant decreases in homeowners that are in a negative equity position. Quarter over quarter, the percentage of underwater mortgages is decreasing in the Central Valley, a trend that spreads across the country.
Dr. Frank Nothaft, the chief economist for CoreLogic was quoted as saying “This increase is primarily a reflection of rising home prices in Lodi, which drives up home values, leading to an increase in home equity positions and supporting consumer spending.”
The Columbus OH real estate market grew more more than fifteen percent to over $150 Billion dollars in 2017. With the median home value in Columbus rising over seven percent year over year. The massive growth can be attributed to the affordability of the Columbus area, with the median home price at just over $200,000. The relative affordability of the homes in Columbus, coupled with the tremendous increases in property value has enticed many people to purchase a second home in the area.
The Boston real estate market has seen some bad press because of the massive rise in home prices in the Greater Boston Area. With the average home price in Boston proper being over $900,000 and the average dollar per square foot exceeding $820. With real estate prices that high and continuing to rise, to own any home in the city of Boston, regardless of size or amenities, can be considered a luxury home.
Panama City Beach FL
Panama City Beach Florida is another coastal area that has seen tremendous growth in their real estate market in 2017. With a tremendous influx of insurance money flowing in from hurricanes over the last few years has created a very fresh set of condominium inventory and has many longtime homeowners thinking of selling their home in Panama City Beach. One real estate broker was quoted as saying “with the numerous hurricanes and beachfront property damage in the last 3 years, almost every home and condo has been rebuilt, we are looking at almost an entire new city of properties to sell…and they are selling fast.” The combination of the overall economy driving tourism coupled with the fresh inventory, the Panama City Beach real estate market has flourished.
The Dallas – Fort Worth real estate market has been on this list for many years. With some Dallas residents waiting for the market to cool off because of the ever-increasing home prices, the D-FW housing market is still seeing homes sell at some of the fastest rates in the country. Dallas has seen a tremendous shortage of housing inventory over the last few years.
Currently, the Dallas market has about a 3 month supply of homes – which is approximate half of what is considered a “balanced market”. In addition, home values have gone up by more than forty percent in the last four years – which is one of the strongest streaks in real estate.
San Diego CA
California makes the list again with San Diego. Although the San Diego market saw a slight slow down toward the end of 2017, they still pulled $530,000 for the average home there. That is still not even close to the peak of the Sand Diego real estate market, which was in 2005, with an average home price of $643,000. Although substantially more than what is found in other parts of the country, many see the current Sand Diego home prices as a “bargain” which is keeping the supply of homes low with the demand high. Many investors look at the current prices as a steal and scoop up new homes as soon as they hit the market, not even digging too deep to find the perfect property — just anything that is not in a bidding war.
2017 Was a Good Year For Real Estate
Overall, 2017 was a great year for real estate. Many expect 2018 to also be another stellar year. One of the major changes in real estate for 2018 over 2017 will be the repercussions of the newly passed tax bill. With the new tax laws, as they pertain to real estate, we are expecting to see many of the more expensive real estate markets such as Boston and San Diego to slow down. Many real estate economists feel that the best real estate markets for 2018 will be the more middle of the road markets that won’t be has heavily affected by the new tax laws. We shall see.