Photo: Alan Stark/Flickr
While many economic forecasters are predicting a “slight slowdown” in the US real estate market next year, some of the country’s hottest metro markets are still expected to continue to sizzle in 2017. And, nearly half of 2017’s hottest markets will be located in the Western US, according to a new forecast by Realtor.com.
Nationally, the housing market is expected to see price gains of just under 4 percent in 2017 over 2016 and just under 2 percent sales growth in 2017, says Realtor.com’s forecasters. However, the metros that make up the top 10 performing markets are expected to record average price gains of 5.8 percent and sales gains of 6.3 percent.
Additionally, Western US metros — which account for 11 of the top 25 housing markets of 2017 markets — are predicted to record average price gains of 5.8 percent and 4.7 percent sales growth, both well above the anticipated national averages, according to Realtor.com.
Phoenix, AZ ranked at the hottest market for 2017. Median home prices are $300,000 and price growth of nearly 6 percent from 2016 is expected next year. Sales are expected to increase 7.24 percent year-over-year as well.
Rounding out the top 10 markets of 2017 were Los Angeles, CA, Boston, MA, Sacramento, CA, Riverside, CA, Jacksonville, FL, Orlando, FL, Raleigh, NC, Tucson, AZ, and Portland, OR.
All of the top 10 metro markets have relatively affordable rental prices, low unemployment rates, a large Millennial and Baby Boomer population, and a high number of listing views on Realtor.com, reports the website.
But supply has been an issue for many homebuyers in these markets, but “these markets are seeing growth in new construction that eases the supply shortage somewhat.”
However, according to Smoke there isn’t nearly enough new construction to keep up with growth, so prices continue to rise at “above-average rates.”
Compared with last year, price growth in 8 of the top 10 markets is expected to decelerate Only Los Angeles and Tucson, AZ, show bigger increases over last year, according to data.
“The top 10 metro markets all benefit from strong growth dynamics: population, jobs, and households,” says Realtor.com’s chief economist Jonathan Smoke.
“They all have low unemployment that’s heading lower, which buoys consumer confidence,” he adds.
However, for all their similarities, “the top 10 metro markets have different buying patterns and price levels,” Smoke notes.
Millennials are more of a buying force in Boston and Los Angeles, while retiring Baby Boomers drive more sales in Phoenix, Jacksonville and Orlando, Raleigh, Tucson and Portland. Veterans come out in force in Jacksonville and Tucson.
Click here to view the entire forecast.