5. San Jose, Calif.
> Year-over-year home price change: 10.4%
> Year-over-year rent price growth: -0.3% (10th largest decline)
> Foreclosure rate per 1,000: 10.6 (35th lowest)
> Median asking price/ sq. ft.: $332.52 (3rd highest)
San Jose’s median home price fell by 31.8% from their peak in the first quarter 2007 through the first quarter of 2012. But between Sept. 2011 and Sept. 2012, the market has been great for homeowners, with home values rising by 10.4%. The city’s real estate market is not just recovering from the recession but has actually grown beyond its pre-recession level. Through August, home construction was at 103.8% of its pre-recession pace, making San Jose one of the fastest-growing cities nationwide. However, despite higher home values, asking rents remained effectively unchanged versus the year before.
4. West Palm Beach, Fla.
> Year-over-year home price change: 11.6%
> Year-over-year rent price growth: 3.6% (43rd largest increase)
> Foreclosure rate per 1,000: 33.0 (4th highest)
> Median asking price/ sq. ft.: $107.92 (33rd highest)
Home prices in West Palm Beach have risen 11.6% year-over-year through September, more than 95% of metro areas for which Trulia data were available. Despite rising prices, West Palm Beach’s real estate market seems to still be rebounding, rather than actually expanding. New homes are being constructed, but at just 54.4% of the area’s pre-recession rate. Still, even this low rate may be high for an area with such a large inventory of homes for sale due to foreclosure. According to Trulia, 33 of every 1,000 housing units were in foreclosure, one of the highest rates in the country. Between the first quarter of 2012 and the first quarter of 2017, home prices in the West Palm Beach’s metropolitan division are projected to rise 6.2% annually, among the higher rates in the U.S.
3. Warren-Troy-Farmington Hills, Mich.
> Year-over-year home price change: 12.0%
> Year-over-year rent price growth: 5.6% (22nd largest increase)
> Foreclosure rate per 1,000: 16.7 (21st highest)
> Median asking price/ sq. ft.: $79.09 (11th lowest)
The Warren area’s housing faced similar struggles to that of nearby Detroit during the housing bust. After peaking in the second quarter of 2005, housing prices fell 40.9% by the first quarter of 2012, well more than the national drop of 33.3%. Housing starts were less than 32% of their normal, historical rate for the area, meaning that the area has a long way to go before experiencing true growth. Between the first quarter of 2012 and the first quarter of 2017, prices in the Warren area are expected to rise 4.6% annually, better than the 3.9% across the U.S.
2. Cape Coral-Fort Myers, Fla.
> Year-over-year home price change: 16.7%
> Year-over-year rent price growth: 5.2% (27th largest increase)
> Foreclosure rate per 1,000: 31.4 (5th highest)
> Median asking price/ sq. ft.: $106.41 (37th highest)
Home prices in the Cape Coral-Fort Myers area rose at the second-fastest rate of all metropolitan areas. Although housing price growth suggests the area is recovering, for the year through August home construction was at just 23% of its pre-recession pace. Additionally, the area’s foreclosure rate was the fifth-highest in the nation, at 31.4 homes per 1,000. A few years ago, any recovery seemed unlikely as home prices fell by 58.9% over six years through the first quarter of 2012, the seventh-largest decline from peak in the nation.
1. Phoenix, Ariz.
> Year-over-year home price change: 23.8%
> Year-over-year-rent price growth: 2.1% (53rd largest increase)
> Foreclosure rate per 1,000: 23.1 (12th highest)
> Median asking price/ sq. ft.: $88.07 (26th lowest)
Through September, home prices in Phoenix have risen by more than 23% year-over-year, faster than in any other city in the nation. Price gains in the area, though, have not coincided with a dramatic growth in the number of available homes for sale, as home construction was still at just 41.9% of its pre-recession pace. A portion of these gains may be due to heavy buying by Wall Street, as companies look to buy properties in Phoenix at a discount, rather than people looking to move to the area. A Bloomberg Businessweek report noted that investors were buyers in nearly 40% of August transactions in Maricopa County, in which Phoenix is located. But despite all the activity by large investors in the Phoenix housing market, rental prices have only risen 2.1% year-over-year.