This is where real estate prices in the US are rising the most this year
Top line
Home prices in upstate New York’s metropolitan areas have risen faster than any other region in the U.S. this year, according to data provided to Forbes by Zillow, making it one of several affordable areas outside of the largest U.S. cities where values — and sales prices — are soaring.
Rochester is one of several cities that form a strong buyer’s market that has developed in the north of the state … (+)
Key data
Syracuse, New York: The average home value has increased 4.3% so far this year (to $230,632), due to the area’s affordability and the fact that there are significantly more buyers than available listings in the metro area.
Zillow home trends expert Amanda Pendleton calls the upswing in upstate New York a “breakthrough era” — an era during which Rochester, Buffalo and Albany have become, along with Syracuse, the top-selling markets in the country, according to Zillow.
Scranton, Pennsylvania: According to Zillow, this sparsely populated metropolitan area has kept pace with the rise in average home values in Syracuse, attracting buyers with affordable homes and home values that are nearly $160,000 below the U.S. average, which is about $360,000.
Hartford, Connecticut: Relatively affordable areas near major East Coast cities are growing in popularity, and Hartford is no exception: The capital city’s median home value ($362,763) has increased 4% so far this year, while the total number of homes for sale in the area has declined 67% compared to pre-pandemic levels.
San Diego, California: Sunny San Diego is the only West Coast region among the five major metropolitan areas with the fastest value growth according to Zillow, and has seen a 3.8% ($958,266) increase in median home value as a sharp increase in new listings has failed to meet buyer demand in the area, posing a challenge for first-time buyers who need to make large down payments.
New York, New York: In New York, the country’s largest metropolitan area, the number of homes for sale is less than half what it was before the pandemic, giving sellers a negotiating advantage and contributing to a 3.6% ($657,279) increase in the region’s median home value.
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tangent
Zillow’s home values data is calculated by taking Zestimates – Zillow’s estimate of a home’s market value – for every home in a region and reporting the middle third. The dates cited in this story range from December 31, 2023 to May 31, 2024.
In which metropolitan areas are prices rising the fastest?
The fastest-rising home prices are in the San Jose area of California. According to data from S&P CoreLogic provided to Forbes, home prices rose 8.2% between December 2023 and April 2024. The other metro areas with the highest increases in sales prices within that time period are: Rochester, New York (8%), Seattle (6.3%), Albuquerque, New Mexico (5.3%) and Anaheim, California (5.2%). Prices in San Jose jumped after a decline in 2022 and 2023, driven by increased mortgage costs due to interest rate hikes. However, last year, San Jose had “the largest share of investor purchases of any market in the U.S., which drove a large portion of demand,” CoreLogic chief economist Molly Boesel told Forbes. Meanwhile, CoreLogic says Rochester home prices have increased due to low inventory and affordability. Home prices in the Seattle metro area fell nearly 15% in the second half of 2022 before a buildup of inventory the following year — but inventory has fallen since then, contributing to a 6.3% increase in home prices. Albuquerque’s real estate market experienced its usual upswing in the winter and spring of this year, while Anaheim recently recovered from a decline in home prices in 2022 and 2023.
Big number
3.1%. That’s the increase in U.S. home prices from December 2023 to April of this year, according to CoreLogic. The jump is slower than 2022 and 2021, but still a larger increase than the same period in the pre-pandemic years since 2015.
Important background
The cluster of the country’s fastest-appreciating metropolitan areas in upstate New York is driven by buyers outpacing supply “drastically,” Pendleton said. Rochester leads the region’s metropolitan areas in terms of buyer-friendly markets, with home values rising from $218,564 in January to $224,734 in May, according to Zillow. The median sales price for a home in the city is $185,333. Limited home supply has contributed to a recent increase in prices nationally, after a slight dip from spring 2022 through most of 2023, triggered by a rise in interest rates, Boesel said. Generally, in the more expensive U.S. metropolitan areas, “home prices have been hit harder in 2022-2023, and some of those areas (are)
see a price recovery in 2024.”
What you should pay attention to
Zillow forecasts home values nationally to rise 0.4% this year and expects home values to fall 1.4% next year. Many new homes for sale are staying on the market for extended periods of time, which has led to a buildup of inventory and put “some downward pressure on home price appreciation,” Zillow said.
Further information
Real estate market predictions for 2024: When will home prices be affordable again? (Forbes)
Real estate prices hit an all-time high in March – here are the fastest growing cities (Forbes)
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