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A new list from GOBankingRates ranks 11 of the most up-and-coming housing markets for U.S. home buyers. The list is based on a variety of local housing and lifestyle-related data, including housing affordability, job growth, population growth, home sales and emerging real estate trends. Topping the list is Denver, with other up-and-coming housing markets including Dallas-Plano-Irving, San Jose, Boston, Raleigh-Durham-Chapel Hill, Austin, Charlotte and Portland.
With easy access to hiking, rafting, skiing, and other open-air activities, the Denver area has long been known as an outdoor enthusiast’s delight. The city was recently ranked in the top 10 18-hour cities – those with access to walkable entertainment options well into the night – in a 2015 report by PWC and the Urban Land Institute. People are moving to the area in droves – almost 55,000 new residents moved to the metro area within the last year alone, according to the U.S. Census Bureau.
“Denver is attracting professionals of all ages as well as families,” said Brian Harris, broker associate and Realtor at Kentwood City Properties in Denver.
Harris added that Denver has recently seen an influx of people who have moved from California; Chicago; and Washington, D.C.
Job growth in the Dallas-Plano-Irving metropolitan statistical area is among the strongest in the nation. The median list price is $274,000 – $40,000 more than the national median but substantially lower than many of the other cities that made this list. The area’s growth combined with its relatively affordable housing market make it worth giving a second look.
The local economy maintains a healthy industrial and financial sector according to Forbes, and the area is also home to many well-regarded universities, including University of Texas Southwest Medical School and University of North Texas. It’s also a great place to raise a family.
San Jose, the largest city in Silicon Valley, is a booming hub for technology and computer firms that continues to be a magnet for upstarts. The U.S. Census Bureau estimates that almost 25,000 new residents flocked to San Jose and its surrounding areas in the past year alone. Top area universities include University of California, Berkley, and Stanford University, which adds a steady stream of technology-focused graduates to the local population each year.
With an average 301 days of sunshine per year and booming job growth – ranked second in the nation by urban research group NewGeography.com – San Jose real estate is highly desirable, and it doesn’t come cheap. The median home price is just shy of $900,000, up 28 percent from last year, though still relatively competitive by Bay Area standards.
A major center for technology and biotech research, North Carolina’s Research Triangle (Raleigh-Durham-Chapel Hill) ranks high for job growth and for affordability. The area is home to several of the nation’s highly regarded universities, including Duke University, North Carolina State University, University of North Carolina at Chapel Hill and Wake Forest University.
“We moved to the Triangle because it had so many of our must-haves, including professional opportunities for both me and my husband, a wealth of intellectual and cultural opportunities thanks to the universities nearby, and a great public school system in our town,” said Ginny Robinson, a magazine writer and editorial assistant who recently moved with her family to the Triangle from California.
Robinson also likes the mild weather and that the cost of living is so much cheaper than it is on the West Coast.
With major “Silicon Hills” employers like Google, Apple, and 3M, Austin is easily one of the top cities in the nation for job growth. Aside from its strong tech footprint, Austin also has a foothold in the pharmaceutical and biotech industries.
Widely known as The Live Music Capital of the World, Austin is home to South by Southwest, one of the largest music and film festivals in the nation. But music isn’t all the entertainment this city has to offer.
“You can’t beat the nature,” said Maria Amaan, a wellness coach who moved to Austin earlier this year because she liked the area. “From paddleboarding to hiking, you will find people active,” she said. “Plus, the food is fresh and delicious, and produce is much cheaper because a lot of the fruits and veggies are grown here or right next door in Mexico.”
Housing is also relatively affordable with a median price of $371,000, but it’s on the rise, up almost 23 percent from last year.
The second-largest banking center in the U.S. behind New York City, according to Forbes, Charlotte has made a name for itself as a major U.S. financial center. It’s one of the hottest U.S. areas for job growth and is home to a number of major universities, including Johnson & Wales University in Charlotte and University of North Carolina at Charlotte.
Housing is extremely affordable; the median home price is on par with the nation’s average of just $234,000. The area boasts mild weather and a low cost of living that is 1.3% below the national average. The city has also been listed as a top 10 most promising market in a PWC and The Urban Land Institute report, which included Charlotte in a group of cities that that have strengthened their urban centers as “live/work/play environments.”
Arguably one of the most green cities in the U.S., if not the world, Portland is highly bike-friendly and walkable, according to WalkScore.com. It also has over 10,000 acres of public parks. Portland has a growing population of young adults and was at the forefront of the nation’s current widespread microbrewery and sophisticated food truck movements.
These trends coincide with PWC and The Urban Land Institute’s findings that the most walkable cities with 18-hour accessibility tend to be the most desirable for millennials – whose numbers total around 75 million according to the Pew Research Center – and moderately attractive to boomers, whose numbers are almost as strong.
Job growth in Portland is strong, and real estate is relatively inexpensive compared with California cities of a similar size, although prices are rising. The median home costs $368,000, up 15% over last year.
Take a guess: how old do you think the average home is in your state? Now take a look at this article from Catherine Sherman of Zillow. It’s a fascinating look at the age of the homes across the U.S., with a map that shows which decade is most represented by the homes in each state.
Homes back East are older, and houses out West are newer, right? Not quite.
We looked at single-family houses built from 1900 to 2014 to see which decades are most represented by the current housing stock. Turns out, the largest share of homes in the Northeastern states was built in the ’80s, but in California the ’50s remains the dominant decade for homes still standing.
Meanwhile, Washington, DC, is holding strong as the area with the oldest decade – the 1920s – most represented today.
Knowing when the largest share of homes was built isn’t just a fun piece of trivia. It also provides a window into the character of real estate in your state.
[Read the full article and view the map]
There are some who believe a home office should feel just like an actual office. But others believe it should feel more like home. The way you decorate your home office should be all about setting up an environment where you can feel most productive. This article from Entrepreneur takes a look at 4 of the trends that are shaping the design and décor of today’s home offices.
No longer consigned to the basement or unused nook, the home office has emerged as one of the most important residential amenities, thanks to an uptick in both self-employment and flexible working trends.
Whether they’re working for themselves or others, some 25 million Americans are calling home “the office” at least one day a week. Among them, 2.8 million self-employed people consider home their primary place of work, according to consultancy Global Workplace Analytics.
Tidiness is increasingly at the center of home-office design, thanks in no small part to Marie Kondo, author of the bestselling book The Life-Changing Magic of Tidying Up. Kondo’s neatnik ethos applies to everything in the home. In the office, she extols the pleasures of purging – not just books and paper but elaborate storage systems, which can be ditched in favor of shoe boxes.
Erica Ecker, owner of organizing service The Spacialist in New York City, says when she started her business 17 years ago, “paper was eating up every space in everyone’s offices.” These days, she helps at-home workers create more space by scanning documents and enlisting digital assets such as online organizers.
Christine Albertsson, principal at Minneapolis firm Albertsson Hansen Architecture, says the “conversation about stuff” is one of the first she has with clients.
“There’s a move toward minimal space that’s smart and uplifting and not cluttered,” she says. “Every person should go through their house and assess what they really need.” That includes a reevaluation of equipment, which she calls “a shifting issue,” as technologies for entertainment and work become less segregated.
In most homes, where every square foot counts, there’s been a rethinking about furniture.
Artisan designers have stepped into the game, making inroads where dedicated built-ins once reigned. In addition to combining function and style, such craftsmen have layered a sort of cognitive feng shui into work surfaces that feel as good as they look.
It’s been a solid summer for existing home sales in the U.S., as indicated by the July numbers released on Thursday by the National Association of Realtors. This article from Bloomberg highlights the results of the report.
Purchases of previously owned homes unexpectedly rose in July for a third straight month to reach the highest level since February 2007, figures from the National Association of Realtors showed Thursday. The gain was driven by stronger sales of single-family homes even as the share of first-time buyers shrank.
A limited number of available properties is keeping prices elevated, giving homeowners the financial flexibility to trade up as their housing equity improves. The data and a recent report showing the strongest rate of residential construction since 2007 are consistent with the Federal Reserve’s view that the industry is making progress.
“Demand is solid,” said Brian Jones, senior U.S. economist at Societe Generale in New York. “The driver is that we’ve got a labor market that’s very healthy and mortgage rates are still very low. The Fed has clearly got to be happy with the housing numbers we’ve seen.”
Another report Thursday showed the job market is holding firm. First-time claims for jobless benefits rose by 4,000 to 277,000 last week, according to the Labor Department. Since early March, applications have been lower than 300,000, a level typically associated with an improving employment.
Purchases of previously owned homes increased 2 percent to a 5.59 million annualized rate last month from a revised 5.48 million pace in June, the NAR said.
Existing home sales, tabulated when a contract closes, are an important barometer of housing demand because they account for more than 90 percent of the residential market. New-home purchases, which make up about 7 percent and are tabulated when contracts are signed, are considered a timelier indicator.
The NAR’s data showed that the median price of an existing home climbed 5.6 percent from July 2014 to reach $234,000. While larger gains in property values hurt affordability for first-time buyers, they help bolster housing equity.
“Current homeowners are using their increasing housing equity towards the downpayment on their next purchase,” Lawrence Yun, chief economist at the Realtors’ group, said in a statement.
Economists predict that the recovering housing market will continue to strengthen throughout 2015, even with the upcoming rise in interest rates. This article from Brena Swanson of HousingWire highlights recent comments by First American Financial Corporation Chief Economist Mark Fleming, as well as a report from Bloomberg that highlights the housing market’s solid positioning for continued growth in the second half of the year.
The housing recovery will be able to digest the upcoming impact of the rise in interest rates, according to one housing economist.
Mark Fleming, chief economist at First American, commented on the Thursday release of the National Association of Realtors’ existing-home sales numbers saying, “An expected move by the Federal Reserve this fall to raise rates will have a moderating, but not devastating impact on market capacity for existing-home sales.”
He also noted that rising rates are an indication of stronger labor market conditions, which is beneficial to the housing market.”
“Pent-up supply is being released and existing owners are feeling more confident to place their homes on the market, helping to drive the actual sales level higher and close the gap between market capacity and actual existing-home sales quickly,” said Fleming.
An article in Bloomberg similarly reported that U.S. home construction would also be okay thanks to its solid foundation from an improving job market and growing household formations.
The article stated: “Housing is in a real sweet spot, moving higher but not dangerously so,” said Eric Green, head of U.S. economic research at TD Securities in New York, who projected a 1.2 million pace. “The housing market will be strengthening over the second half. The Fed raising rates will not change that.”
Where’s the sweet spot for your master suite: upstairs or down? This article from Builder, part of a new series that checks in on the latest trends in new home construction and design, looks into recent sales data and highlights some of the reasons why Americans are preferring their master suites within reach – on the main level of their homes.
With the tide swell of baby boomers reaching retirement age, accessibility will only become more important in the home. That’s why it just makes sense to have the master suite on the main floor of the home whenever possible. Of course, not all lots have enough room to accommodate this, and not all buyers want to be downstairs (young parents often wish to remain near their kids upstairs).
But master-on-main layouts are seemingly everywhere. Laura Segers, vice president of sales operations at Frank Betz Associates, took a look at the top 100 best-selling plans of the last two years and broke them down by layout type.
The results? Although the top 100 plans showed a slight increase in the number of two story designs with the master suite upstairs in 2014 (15% versus 14% the year before), the number of one-story plans in the top 100 increased by two percentage points. Overall, the overwhelming majority of the top 100 best-selling plans (83%) feature accessible master suites, with steps not required to reach them.
“I seem to remember this type of design appearing in the mid to late 1980’s and it has been continually growing in popularity ever since” says Russell “Rusty” Moody, president of Frank Betz Associates.
Moody lists a perfect storm of demographic and layout trends that all point towards a first-level master suite, including an aging population that needs accessibility, greater privacy, and increasing demand from multi-generational homebuyers.
During the second quarter of 2015, the median size of homes that went under construction was smaller than the size of homes built in the first quarter by 40 square feet. That’s about the size of a walk-in closet, as The Wall Street Journal points out, in this article that takes a look at the potential increasing role of first-time homebuyers in the future of the U.S. housing market.
The median size of U.S. homes built in the second quarter declined from the record set in the previous quarter, suggesting builders are starting to shift toward producing more entry-level homes.
Of the 206,000 homes that went under construction in the second quarter, the median size was 2,479 square feet, according to Commerce Department data released Tuesday. That was 40 square feet smaller than the high set in the first quarter.
The National Association of Home Builders estimates that first-time buyers, who tend to purchase entry-level homes, will account for 18% of new-home sales this year. That is up from 16% last year but still well short of their share of 25% to 27% from 2001 to 2005. Then, quarterly median sizes for new homes ranged from 2,051 to 2,263 square feet.
David Crowe, chief economist for the National Association of Home Builders, foresees a “moderation” of the median size of newly built homes as more first-time buyers come into the market. But he added that it will take a long time for the shift to be reflected in the national median-size figure, because the factors buoying first-time buyers – a loosening of mortgage-qualification standards and growth in jobs and wages – are progressing slowly.
As the housing market continues its recovery, this article from Trulia Chief Economist Selma Hepp dives into the numbers from Census building permit data in 100 of America’s largest cities to highlight the hottest markets for new home construction in 2015, and takes an interesting look at the effects of that construction activity on area home prices and employment growth. For single-family homes, Austin, Houston, Charleston and Nashville top the list, while the top multi-family markets are New York, Boston, Philadelphia, and Los Angeles.
Compared to last year, many of the same housing markets where new construction was highest above normal – New York, Boston, Los Angeles, San Francisco, Houston, Orange County, and Dallas – are still building a lot. The new kids on the block to the top 10 list this year are Philadelphia, Newark, and Seattle, where the increase in permits is at least 50% to 75% higher than their respective historical norm. In fact, 27 of the 100 largest metro areas are now building more than their historical average with the growth in most having picked up markedly.
Among the top 10 U.S. metros where new construction activity is highest above average, metro New York ranks highest with 2.5 times the historical average. Cyclicality is in the nature of the home building construction and many of the growing markets are on the upward slope of the current cyclical upswing.
Since last year, the share of multi-family buildings has increased in most of the metros that topped last year’s hottest homebuilding markets list.
In some of the top 10 markets, multi-family construction was higher than the historical norm by several fold. For example, New York’s activity is more than four times higher, while both Boston and Newark are almost three times higher. Even in Dallas and San Francisco where the multi-unit increase was lowest among the top 10, it is still more than double the historical norm.
Today, there are generally more markets with building activity above the historical norm. Those markets also tend to be the bigger metro areas where price appreciation remained more robust than in smaller markets.
The correlation between permit activity relative to historical norms and the employment growth since the cyclical bottom is +0.29, which is again a modest, but statistically significant positive relationship.
This morning, the Commerce Department released its July report on U.S. home construction, indicating the highest level of housing starts since October of 2007. This article from CNBC highlights some of the details from the report.
U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes, suggesting that the economy was firing on almost all cylinders.
The Commerce Department report on Tuesday added to solid payrolls, retail sales and industrial output data in suggesting the economy got off to a strong start in the third quarter. The steady flow of upbeat economic reports has bolstered views that the Federal Reserve will raise interest rates in September.
Groundbreaking increased 0.2 percent to a seasonally adjusted annual pace of 1.21 million units, the highest level since October 2007. June’s starts were revised sharply higher to a 1.20 million-unit rate from the previously reported 1.17 million-unit pace.
Housing starts have now been above a one million-unit pace for four straight months. Economists had forecast groundbreaking on new homes rising to a 1.19 million-unit pace last month.
Housing is getting a tailwind from a tightening labor market, which is encouraging young adults to move from their parents’ basements and set up their own lodgings. The firming housing market is bolstering profits at Home Depot.
Groundbreaking on single-family housing in the West increased to its highest level in nearly eight years.
