Nearly four years after housing prices hit rock bottom nationally, the market for homeownership has been steadily making its recovery. But some housing markets have fared better than others during this rebounding period.
“For many U.S. housing markets it’s been a tale of two recoveries,” writes Felipe Chacón, housing data analyst at Trulia. “Nearly four years after housing prices hit bottom nationally, some metro areas have seen big gains in employment, wages, housing prices. Others have seen sluggish economic growth and lagging prices. Still others have seen a mix—booming employment and lagging housing market or vice versa.”
In a recent analysis, Trulia crunched the numbers to find out where are the best and worst places to buy or rent since the housing market bottomed out; analyzing data such as job prospects, wages, vacancy rates, home values to determine what cities offer the best opportunities.
Among the top-10 best places for homeownership since the housing market bust, many of these cities lay out west in California, Colorado and Washington, or down south in places like North Carolina, Florida and Texas.
The top ranked U.S. metro for homeownership was San Jose, California, according to Trulia’s analysis. The city had an owner index of 98.2, earning it the number one ranked spot on the best places to own.
In San Jose, home prices have increased 44.38% since the housing market bottomed in 2012; job growth has increased 12.59% and wages have improved 11.64%. Meanwhile, the city saw a 45.73% decline in its unemployment rate and a 35.58% drop in vacancy rate—all adding to San Jose’s top ranking overall.
Coming in at second place for homeownership was San Francisco, which posted an owner index of 97.2. The city, while commonly known for its rising costs of living, has seen home values rise 42.81% since the market bottomed. Job growth and wages have also increased substantially for the metro, each seeing increases of 14.43% and 20.26%, respectively, while unemployment has declined 46.97%.
Venturing more inland, Denver rounded out the third ranked spot for homeownership, posting a Trulia owner index of 90.8; job growth of 11.49%; wage growth of 6.55%; and home value growth of 29.69%.
Metros like San Francisco Bay Area cities as well as places like Denver, Seattle and even Houston, have been driven by consistently strong labor market fundamentals, which have added to each of these cities being great places to have bought a home in 2012, said Chacón.
In the creation of its owner and renter indexes, Trulia looked at several key metrics on the 100 largest U.S. metro areas. First, Trulia combined three components of labor market data with vacancy and price metrics as a way to weight the importance of being able to find/keep a job in an area with increasing pay more heavily than availability and price appreciation.
Trulia then pulled data on wage, covered employment and unemployment rates from the Bureau of Labor Statistics, taking the four-quarter rolling average for these metrics, and then ranking and scoring each metro based on the percent change from the first quarter of 2012 to the first quarter of 2015, the most recent data available.
Lastly, the percent change in the Zillow Home Value Index by metro was used to rank and score on price appreciation.
The overall indexes featured in the analysis reflect an aggregate score calculated for each metro for the owner index.
Read the Trulia analysis to see the top-10 best and worst places to buy or rent in the U.S.
Written by Jason Oliva