Fortune, one of America’s leading financial magazines, recently held a panel discussion among experts within the housing market industry. The editors asked them what the market will look like over the coming year. Most experts provided vague and even confounding answers: “mysterious.” The main takeaway here is that the beginning of 2015 found most housing market prices on par with the prices posted back during the housing market boom. We can no longer expect the spectacular recoveries or collapses (i.e. the highs and lows of the past couple years) in any of our states. The hard factors (such as population growth and a new generation of first-time buyers) will now set the tone of the U.S. housing market in 2015. At the same time, we expect mortgage rates to increase, prices to remain the same, and affordability to drop. We based the final part of our forecast on what we call ‘the millennial mismatch’ (i.e. the discrepancy between Gen Y’s wage growth and their preferences for housing). Let’s take a look at what we should reasonably expect to be The Top 25 Housing Market Predictions for 2015. We will rank this list from the bottom to the top coveted spot.
25. Austin, Texas
The Austin/Round Rock, Texas area experienced an 8.9 percent growth in population between 2010 through 2013. The area also experienced a year-to-year growth in number of jobs of 3.6 percent. Considering the area’s solid economy, no wonder Forbes lists this metropolitan area as one of the best to invest in. The average housing price stands at $261,923. 8 percent of the listings have prices above that figure.
23. Fresno, California
Although Fresno is in California, this metropolitan area serves as an example of a paragon of affordability (rather than a hotspot for the rich and famous). Median sales prices stand at the $185,000 mark. That figure dropped by .9 percent over the past year. Compare that to the median state income per household of $47,493. Fresno might just become THE place to live in California this year.
22. Orlando, Florida
With a population over 2.2 million for the metropolitan area, Orlando serves as a major market in the real estate industry. However, this is still affordable. The average home price sits at the $187,000 mark. Although the current unemployment rate remains at 5.7 percent (compared to the paltry job growth rate of 3.6 percent), population numbers continued growing. This growth signals a demand in the market.
21. San Antonio, Texas
San Antonio isn’t the most dynamic market in the country. However, we feel that its size and stability will make it appealing this year. With a population nearing 2.3 million and a somewhat affordable average home price around $189,000, San Antonio should continue its trend of appeal for home owners and investors.
20. San Jose – Santa Clara, California
San Jose serves as an example of an interesting albeit unaffordable housing market. We expect that San Jose-Santa Clara will experience a moderate rise in prices around 2 percent. However, new job growth should somewhat offset this. The housing supply in the region is not abundant in the traditional sense of the word. But, both household income and employment in the region are currently on the rise. The median listing price sits around $725,000 according to Realtor.com.
19. Atlanta, Georgia
Atlanta’s housing market has a lot going for it this year. Median prices stand around $200,000. Atlanta also consistently ranked as the seventh best in household growth rate over the past 5 years. Although we expect home prices to increase by 5 percent, the number of sales should also appreciate by 11 percent. This appreciation makes the Atlanta-Sandy Springs area one of the best in the country for potential home owners in 2015.
18. Phoenix, Arizona
Phoenix is a wonderful market for new housing activities. In 2015, we predict incomes will rise significantly and construction of new homes will increase by 22 percent. Unfortunately, unemployment has not dropped as quickly as other regions and housing affordability could be better. Median listing prices sit at the $260,000 mark. With that being said, job growth is close to the national average.
17. Provo, Utah
With its population over half a million and a growth rate of 6.2 percent over the 2010-2013 time period, Provo is a wonderful place to live. Its rate of job growth is 3 percent and the unemployment index sits at 3.1 percent. As of the time of this post, 7 percent of homes on the market were underpriced. The average home prices sit at an affordable $211,000. By and large, underpriced markets are good for families but could prove difficult for investors.
16. Denver, Colorado
The median housing price in Denver sits at $375,000. This price will allow you to purchase a newly renovated one bedroom condo in downtown Denver. The housing supply is tight in the area, yet the market still has room to grow. We predict that the number of home sales will increase by 14 percent in 2015 making this region the fastest growing market in the country. Denver’s recovery from the recession continues at a strong pace. Unemployment should continue to decrease this year.
15. Des Moines, Iowa
Des Moines’ homes carry a median price tag of $187,000. This regional market offers great up-and-coming homes for young buyers. Additionally, the small market is relatively stable and affordable. According to our research findings, a household earning the median state income should be able to afford a home that’s priced at roughly twice the current median price. Unemployment is also low here, making this an excellent market for young, first-time buyers.
14. Boise, Idaho
In many ways, we feel that the 2015 housing market in Boise, Idaho should appear similar to the one in Des Moines. The population of this market is not exactly large with only 650,288 inhabitants. However, the population grew in the past few years. The region boasts an impressive low level of unemployment, a low average home price ($183,649), and 6 percent of the homes on the market are priced below the median (which is high compared to national figures).
13. Oklahoma City, Oklahoma
OK City is a relatively large market with fairly low unemployment figures and a yearly job growth index of 3.3 percent. OK City boasts a whopping percentage of underpriced homes on the market (20 percent). Average home prices remain low ($166,000) as the state’s economy continues its upward swing this year. The region should also experience an increased population growth (4.8 percent between 2010 through 2013).
12. Washington D.C.
The median listing price in the country’s capital is about $510,000. This market should move up to (and remain at) the fifth spot in household growth until 2020. D.C. currently holds the seventh largest market in the country in terms of population and the sixth largest by number per household. After some disastrous years in 2013 and 2014, home prices should rise by 3 percent. By contrast, these prices dropped by 2 percent last year.
11. Minneapolis, Minnesota
There’s little to dislike about the current housing market in Minneapolis, St. Paul, and Bloomington. This is especially true if you’re a young professional. The market currently offers affordable prices (median listing prices hover around $245,000), and construction teams are building a lot of new homes right now. The economy is not half bad and housing stock is plentiful. Because of this, Minneapolis (and its surrounding cities) currently ranks as the second largest market in the country for millennials.
10. Houston, Texas
The Lone Star state offered an incredibly strong housing market in the past. This trend should continue through 2015. Houston stands as the third largest market in the U.S. in terms of household growth. We believe that (based on research) employment levels will increase at twice the rate of the national average. In turn, this growth should help increase the number of home sales by 5 percent. Unfortunately, the 2 percent increase in home prices may slightly affect affordability.
9. Raleigh, North Carolina
Raleigh welcomed in the New Year with 2,466 homes on the market and an average listing price of $337,377. That figure actually continues to decrease at a slightly lower rate on a week-to-week basis. The median sales price for this metropolitan area experienced a 6 percent decline over the year. The figure decreased to $205,000. However, the median household income in Raleigh sits substantially higher at $46,612 (compared to the state average of over $39,000).
8. Los Angeles, California
We expect L.A.’s Long Beach metropolitan area will see a major household growth of 4 percent over the coming 5 years. That figure serves as the fourth highest throughout the country. Home sales should grow by 6 percent. This area is the second most populated market in the country according to CNBC. Unfortunately, L.A. is not the most affordable market in the U.S. This year likely spells the end of the recovery from the recession considering the high increase of employment and job openings.
There currently aren’t many properties for sale in the Salt Lake City metro area. That lack of availability just goes to show that this city has enjoyed a long run of popularity and affordability. Due to the shortage, prices are pretty high. However, Salt Lake compensates for these prices in many ways. Average listing prices at the beginning of 2015 stood at $436,918. The figure is slightly receding downward compared to the final week of 2014. The Sugar House and Greater Avenues neighborhoods offer some of the most popular homes.
6. San Diego, California
The median sales price in San Diego increased by $15,000 (or 3.4 percent) up to $450,000 over the past twelve months. A lot of foreclosures (1,870 to be precise) still exist on this market. Interestingly enough, several neighborhoods in San Diego hold listing prices over the $1 million (such as Carmel Valley, Horton Plaza, and Lower Hermosa to name a few). However, Rancho Valley (which has an average listing price of $521,234) is far more popular.
5. Nashville, Tennessee
Many experts recognize Nashville for its well known, idyllic, and verdant suburbs. However, Nashville also offers an interesting housing market: the metro area is realistically affordable yet still provides opportunity for strong investment regarding median sales prices. Throughout the last quarter of 2014, this index grew by 8 percent to a median price of $205,000. Those lush suburbs appear quite popular: Inglewood, Urbandale Nations, West End, Hillsboro West End, West Meade, and Bordeaux stand as the best priced neighborhoods in Nashville.
4. Seattle, Washington
The housing market in Seattle saw a 4.8 percent year-on-year increase in median sales prices. This index currently stands at $440,000 according to Trulia.com. Unfortunately, the city market is experiencing a shortage of housing units for sale in the metropolitan area with only 839 homes for sale. The market currently favors Belltown and Broadway as the most popular neighborhoods to buy homes in this year, with average listing prices of $736,000 and $534,000 respectively.
3. Dallas, Texas
Dallas has a highly dynamic property market. The average listing price early on in the year stood at $706,376. Some of the more coveted neighborhoods (Preston Hollow and Oak Lawn) held average listing prices well over the $1 million mark. The government ranks both public and private schools in Dallas highly. Violent crime only affects 1.21 percent of the metro population in 2014. This area looks like the best place to be for the more affluent families of the U.S.
2. Boston, Massachusetts
We don’t just expect big things from Boston and its metropolitan area in 2015. According to our research, we feel that the entire Middlesex County will boast wonderful real estate prospects. Crime currently remains relatively low in Boston at a paltry 1.34 percent in the city. Furthermore, Massachusetts holds an impressive average of 0.45 percent for the entire state. The median value of occupied homes currently stands over $190,000. The median household income is currently $39,600 (with a state average of $50,000). Meanwhile, the median sales price currently rest right around $480,000 with a 12.9 percent year-to-year increase. Affordability looks quite positive in Boston, which is what places it so high on our list.
1. New York, New York/New Jersey
Trulia.com says that the average listing price in New York City fell to $3.7 million dollars during the first week of the year. That figure constitutes a 1.5 percent week-to-week decrease. So, while prices in the city are astronomical, now is the time for investors to swoop in on these slight drops. The yearly median sales price stands at $1.3 million with a year-to-year increase of 16.9 percent. Like so many other places in this country, the market in NYC is dictated by supply and demand. New housing space is largely inexistent. So, the market must seize old property to transform into largely new real estate. No wonder millennials keep demanding housing in places where new housing is largely impossible. This attitude is very much in the spirit of that generation. In turn, that very spirit will most likely keep New York at the top of the housing market charts over the coming year. It’s no wonder The Big Apple takes the top spot in our chart. If you can make it here, you’ll make it anywhere.