Go West, young man, but only if you’re ready to pony up for a place.
When it comes to expensive real estate, some cities will always come to mind, and that is unlikely to ever change. So while New York, D.C., and San Francisco will likely forever be expensive places to own a home, there are several other American cities that are having dramatic jumps in home prices. There are many reasons for this, but undoubtedly most are out west.
Here are five cities that are seeing home prices skyrocket before the housing market has even had a chance to stabilize.
Phoenix
Phoenix’s housing situation is precarious. When the market bottomed out, the city saw an influx of investors taking over distressed homes and making them rent homes instead of flipping them. When the housing market finally started to pick up, this left potential homebuyers with fewer options. This has already become problematic for the city, because even though prices are still rising, demand is in “an 11-month slump,” said Michael Orr, the director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at ASU.
Sacramento
California has bounced back in a big way since the Great Recession, with the state gaining back every job it lost in the Great Recession, according to the U.S. Bureau of Labor Statistics. As confidence in the state’s economy continues to rise, the construction industry has been one of the biggest gainers in the Sacramento area with 7% growth in the past year.
While that may not seem like a big number, construction was crushed in the recession, as the city had been plagued with overdevelopment and speculation. And with forecasters predicting that California’s Capital Region will see more growth in the construction industry, the rising home prices are proving to be a sign of a lively economy.
Las Vegas
Just about everyone lost when the housing bubble burst — but Las Vegas really, really lost. Citywide, one in 13 homes went into foreclosure, the most drastic of any metropolitan area in the US. But the city is resilient, and prices have been rising quickly since 2011. In July, the Greater Las Vegas Association of Realtors announced that median home prices hit $200,000 for the first time since 2008.
Atlanta
The story of Atlanta’s booming housing market is remarkable. For decades, tensions between the city and the rest of the state meant that many families and businesses often settled in the suburbs. But since 2010, the population of Atlanta has been increasing by around 6.6% annually, and because of this, the city experiencing a renaissance. As Atlanta becomes more attractive to the rest of the state (and region,) housing costs are quickly becoming expensive. Once abandoned office buildings have now been turned into trendy residential areas with high price tags.
Boise
Before the economy tanked, Boise’s downtown was undergoing major revitalization, with high-rises and lofts in the planning and early construction stages. But then the bubble burst, and those plans were abandoned. But Boise has bounced back rather quickly from the economic downturn, and the city is again beginning to see the growth it was witnessing pre-recession. As the city grows, the need for housing closer to downtown is starting to become apparent, and it is experiencing the classic case of supply vs demand. Right now, there is only one apartment or condo for every 11 jobs in downtown Boise. And only 20 of the 271 condos are still for sale.