With the Federal Reserve set to begin raising US interest rate as an accelerated pace this year, realtors are seeing demand for US property rise at the start of 2017.
However, while the US housing market is generally strengthening some locations are showing significantly stronger growth than others, with some of the most lucrative areas for both home buyers and investors surprising many analysts.
Following the recession some housing markets became almost toxic to investors as a huge number of homes were foreclosed, however according to TenX (a real-estate auction and analytics company) this trend is now reversing.
By rating locations based on a number of key factors including population, wage growth and unemployment, TenX has created a list of markets that are performing particularly well, with Tampa, Florida, shooting to the top of the leader board despite thousands of homes being repossessed at the height of the financial crisis in 2008.
Rick Sharga, chief marketing officer at TenX, said;
‘Florida is recovering very nicely from an economic standpoint, we’ve seen unemployment numbers drop pretty dramatically there. We’ve seen job growth and wage growth stick for a few years now, and we’ve seen a very steady increase in both the sales of homes and home prices.’
Florida actually managed to claim two of the top spots on the list as Jacksonville came in 5th. Even more surprisingly however was how quickly the Las Vegas housing market has recovered since the recession. After being referred to as the epicentre of the housing crash nearly a decade ago (as it claimed the title for having the highest foreclosure rate in the US), the city has leapt back to number 4 on the list.
This dramatic recovery is of course partly thanks to prices still hovering around 20% below their highest point before the financial crash.
‘What we’re seeing is a return to population growth. Prior to the housing bust, Las Vegas had some of the steadiest population growth in the country. We’re starting to see that again.’
Rounding out the list were Columbus, Ohio, at number 3 and Dallas coming in second, with demand for the latter being bolstered by strong employment growth and the desirability of the area, which has seen the city’s population growth nearly triple the national rate in recent years.
The cities in which housing growth isn’t so healthy is where prohibitively high prices and a shortage in supply have begun to choke the life out of the market, with Los Angeles, San Francisco and New York all ranking in the top five as most buyers are priced out of the market.
Meanwhile both Central and Northern New Jersey have ranked at the very bottom of the list as TenX reports that both are struggling with high house prices amidst poor job and population growth.
All this indicates that anyone considering a property purchase in the US may want to consider Florida, Las Vegas or Ohio if they want to get a good deal or like the prospect of seeing a solid return in the future.