The Hottest Housing Markets of 2013

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10. Denver, Colo.
> Change in home value: 13.1%
> Current home value: $234,200
> Bottom in home value: Q2 2011
> Forecast change in home value: 3.1%

The city experienced robust growth in 2012, and this is likely to continue, according to Zillow. However, between 2013 and 2014, home values are expected to rise only an additional 3.1%, by far the smallest growth of any housing market on this list. The Denver market did not fall as hard as other areas during the housing collapse. Between the peak in the first quarter of 2006 and the third quarter of 2012, Denver home prices only fell 5.4%. This February, more than 5,000 homes sold — an increase of 27% from the same month last year.

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9. Detroit, Mich.
> Change in home value: 13.1%
> Current home value: $84,700
> Bottom in home value: Q3 2011
> Forecast change in home value: 4.4%

In recent years, Detroit has been hit by a steep decline in home prices, as well as continued contraction in the automobile industry. As of the first quarter of 2013, the average home value in the Detroit area was just $84,700, by far the lowest of all the large metro areas in the country measured by Zillow. Investor purchases helped push home values higher, although not as much as they did in many cities in California, Gudell said. Detroit continues to suffer from high unemployment. The area’s unemployment rate was 11.3% in February, down just slightly from 11.5% a year ago.

8. Los Angeles, Calif.
> Change in home value: 14.9%
> Current home value: $439,400
> Bottom in home value: Q1 2012
> Forecast change in home value: 11.1%

In addition to the nearly 15% growth already experienced in the past year, home values are expected to rise an additional 11% next year. The growth in the housing market in California has led to growth in employment as well. The unemployment rate in the Los Angeles metropolitan area was 10.3%, a significant improvement from the 11.6% rate a year ago. Between February 2012 and February 2013, the number of people employed in construction rose 7.1%, an indicator of an improving housing market.

7. Riverside, Calif.
> Change in home value: 16.3%
> Current home value: $210,100
> Bottom in home value: Q1 2012
> Forecast change in home value: 17.2%

Like many parts of California, the Riverside metropolitan area is recovering from the housing bubble burst. Home values are expected to jump 17.2% in the coming year, more than any other large city in the United States that Zillow considered. Like all other metro areas on this list, the unemployment rate in the Riverside area has fallen also, although it remains comparatively high.The 10.8% unemployment rate in February was 1.8 percentage points lower than it was in the same month of 2012.

6. San Diego, Calif.
> Change in home value: 17.1%
> Current home value: $396,800
> Bottom in home value: Q1 2012
> Forecast change in home value: 8.8%

Between the market peak in the first quarter of 2006 and the third quarter of 2012, home prices fell 37%. But now home values have rebounded, increasing 17.1% from the first quarter of 2012 to the first quarter of 2013. This included a 5.5% increase in the past quarter alone. There were 3,769 home sales in February in the San Diego housing area, an increase of nearly 5% from the same month in 2012. The unemployment rate in San Diego was 8% in February, a significant improvement over the 9.4% back in 2012.