10 Cities With The Hottest Housing Markets

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10. Tucson, Ariz.
> Year-over-year home price change: 8.6%
> Year-over-year rent price growth: 0%
> Foreclosure rate per 1,000: 14.4 (31st highest)
> Median asking price/ sq. ft.: $91.74 (31st lowest)

Like other cities in Arizona, Tucson was hit hard by the housing downturn. Since peaking in the first quarter of 2006, housing prices in the city sank by 43.9% by the first quarter of 2012. According to the Tucson Association of Realtors, there were 938 home sales in the month of September, the lowest number this year since January’s 915 sales. Nevertheless, the number of homes sold in 2012 through September was up 6% from the same time last year. The average sale price in the month of September was $182,041. Tucson’s market is expected to improve significantly in the coming years. Housing prices are expected to grow at an annual rate of 7.8% between 2012 and 2017, far better than the 3.9% expected average growth across the country.

9. Orlando, Fla.
> Year-over-year home price change: 8.7% (tied-8th)
> Year-over-year rent price growth: 7% (15th largest increase)
> Foreclosure rate per 1,000: 36.1 (2nd highest)
> Median asking price/ sq. ft.: $81.48 (15th lowest)

Between the second quarter of 2006 and the first quarter of this year, the median home price in Orlando fell by more than 50%, one of just a handful of major markets to be hit that much. In the last 12 months home prices have gone up by 8.7% in the past year. However, the market still has a long way to go before it can be considered healthy. The rate of construction on new homes is at just 44% of the normal, pre-recession rate for the area. And the August foreclosure rate of 36.1 of every 1,000 homes is the second highest in the country among large metro areas.

Also Read: States with the Highest (and Lowest) Taxes

8. Denver, Colo.
> Year-over-year home price change: 8.7% (tied-8th)
> Year-over-year rent price growth: 9% (8th largest increase)
> Foreclosure rate per 1,000: 10.6 (34th lowest)
> Median asking price/ sq. ft.: $119.85 (25th highest)

In 2011, while home prices declined 1.9% nationwide, Denver’s home prices increased 2.4%. The Denver metro area has been listed as one of the country’s top 20 real estate markets, according to a study by PricewaterhouseCoopers. The firm’s study further points out that the housing bust was less severe in Denver compared to many other large markets, and that the market doesn’t have as many homes in foreclosure or in delinquency compared to other metro areas. PwC also cited Denver’s young population — 16% are between ages 25 and 34 — as evidence of an emerging economy. Housing construction starts were at 72% of historical levels, which was one of better levels among large housing markets, indicating a strong rebound from the downturn.

7. Oakland, Calif.
> Year-over-year home price change: 9.0%
> Year-over-year rent price growth: 9.2% (7th largest increase)
> Foreclosure rate per 1,000: 18.3 (19th highest)
> Median asking price/ sq. ft.: $227.27 (7th highest)

Over the past year, prices for both home sales and rentals were up 9% in Oakland. Much of the gains in the housing market has come in the most recent quarter, during which prices rose 8.2%, the highest in the nation during that time. The growth may be partly due to the expensive San Francisco real estate market driving renters and prospective homebuyers across the bay. Trulia data show that the already expensive San Francisco home prices were up 7.5% year-over-year, while rental prices were up 7.2%. Construction starts in the Oakland region were at 59.9% of pre-recession levels, higher than many major metro areas.

6. Detroit, Mich.
> Year-over-year home price change: 9.1%
> Year-over-year-rent price growth: -1.3% (tied-4th largest decline)
> Foreclosure rate per 1,000: 19.2 (17th highest)
> Median asking price/ sq. ft.: $46.81 (the lowest)

With the near collapse of the American automobile industry, Detroit had a particularly difficult time dealing with the housing crash. After peaking in the first quarter of 2006 housing prices in the area fell by 55.8% by the first quarter of 2012. And Detroit’s housing market is still struggling. Housing construction was just 23.5% of the historical level for the area, indicating it will take awhile for Detroit to reach its previous growth before the downturn. Fiserv projects home prices will rise by just 1.6% in the Detroit metro area between the first quarter of 2013 and the first quarter of 2014, compared to an expected national increase of 5%.