On a national level, the median price for an existing single-family home is set to rise by an average of just 2% between 2015 and 2018, but a new study suggests that some markets are poised to leap far ahead and others far behind this big picture of appreciation.
This modest growth of the national housing recovery masks wide local discrepancies, with some marketing “soaring ahead and others still very much distressed,” says the Demand Institute in its report “A Tale of 2000 Cities.”
“In terms of prices, the aggregate, national-level improvement does not resemble a rapid, V-shaped recovery, in which the pace of price rises matches the pace of earlier declines,” says the report written by Louise Keely and Kath Bostjancic. “Instead, it is a steady, moderate recovery that should continue through 2018.”
On a smaller, more localized scale, the report found a disparity in price increases between states.
States likely to see the strongest rise in the median price for an existing single-family home by the end of 2018 include New Mexico (33%), Mississippi (32%), Maine (31%), Illinois (31%) and New Hampshire (28%).
Those likely to experience the lowest projected price increases, according to Demand Institute’s expectations, are Washington D.C. (6%), Minnesota (13%), Virginia (14%), New York (14%) and Alaska (15%).
In addition to forecasting how home prices will perform within each state through 2018, the report also projected price movements within the largest 50 metropolitan statistical areas (MSAs), as measured by population size.
Memphis and Tampa are the top metros anticipated to experience the strongest increases in single-family home prices, rising approximately 33% between 2012 and 2018, according to Demand Institute projections.
Florida’s Jacksonville follows next at 32% projected growth, while Milwaukee and St. Louis round out the top five metros with 30% each, respectively.
In contrast, cities with the lowest projected price appreciation over the same period are expected to be Washington, D.C. (7%), Oklahoma City (10%), Denver (11%), Minneapolis (12%) and Phoenix (13%).
To gauge the future health of the U.S. housing market, Demand Institute collected data on 2,202 cities and towns that had an estimated population of more than 15,000 in 2011, according to U.S. Census Bureau statistics.
Within each of these municipalities, Demand Institute looked at over 500 measurements, including home values, existing home sales, new home construction, foreclosures, household incomes, demographic information, employment rates and composition of the labor force, among others local factors such as quality of schools and retail outlet density.
Written by Jason Oliva