The housing market has definitely rebounded in 2013, with levels of optimism not seen since before the recession took hold in 2008. A study by Rasmussen says that nearly 40 percent of Americans believe their home will increase in value in the next year, and nearly 60 percent believe their home is worth more than when they bought it. This positive feeling among homeowners could be a response to rising home prices, up 24 percent overall in the past year. While the market is starting to boom all over the country, there are some cities where home buying is creating more of a frenzy. These housing markets have their own advantages that make owning property there a smart investment for the future.
1. Sacramento, CA
Housing markets are thriving all over California, which was harder-hit by the collapse of the housing bubble than almost anywhere. But while some cities are benefiting from attracting exclusively high-income buyers, Sacramento is benefiting from the fact that there hasn’t been enough home construction to keep up with the demand for such a popular area. Sacramento lead the nation in housing market growth at the start of 2013, proving that places which fell the farthest can rebound the strongest.
2. Denver, CO
The amount of homes for sale in Denver is the lowest it’s been in nearly 3 decades, creating a hugely competitive market and a 20 percent rise in home prices since 2012. Nearly any home listed in the city is guaranteed to inspire a bidding war, which is why previously reluctant sellers are becoming more willing to list their houses. Even seriously indebted homeowners can turn a profit, or at least come out less scathed than they expected. Of course, some sellers are still sitting on their properties simply out of fear that the shortage will make it tough to find a replacement.
3. Orlando, FL
The market in Florida rivals the market in California for the most noticeable statewide rebound. Florida has an increase in building, a decrease in foreclosures, and a rise in actual land prices that has surpassed peak levels in some areas. But Orlando is leading the pack, in part because it’s a very popular city for foreign buyers. Their cash down payments are helping to spark competition in the local market, while the city still rates as very affordable to buyers. It also helps that Florida is a judicial foreclosure state, so it takes the banks much longer to snatch up houses.
4. Phoenix, AZ
With a 23 percent increase in home values and one of the lowest foreclosure rates in the country, the housing market in Phoenix has had a stellar year so far. In fact, the market there is so hot that some analysts fear it could turn into a bubble. But others insist that the replacement of credit-based buyers with cash buyers has served to stabilize growth in new ways, and the weather, age of homes, and lack of foreclosed homes is driving Phoenix’s new reputation as a great place for property investors.
5. Las Vegas, NV
Similar to Phoenix, Las Vegas has seen a drop in foreclosures and a rise in prices, including the price of land. But with interest rates still low, the housing market is recovering at a more affordable pace. The city still has a high percentage of renters, which is good news for investors. And the good news for home buyers is there’s a much smaller difference between income levels and average home prices than in much of the nation, signaling an overall improvement in the local economy.
There are many patterns emerging in the hot markets across the United States. Fewer foreclosures, cash investors, and a lower supply of houses on the market are causing a real rebound in housing. Many still fear another housing bubble, but it looks like the market may actually improve at a stable rate after all. In that case, every city wins.