The Hottest Housing Markets of 2013

Print Email

5. Sacramento, Calif.
> Change in home value: 20.1%
> Current home value: $241,600
> Bottom in home value: Q1 2012
> Forecast change in home value: 15.6%

Home prices in Sacramento peaked in the fourth quarter of 2005, earlier than most metropolitan areas. Between the peak and the third quarter of 2012, home prices fell a painful 51.5%, which was among the largest drops in the entire country. Between the first quarter of 2013 and the same quarter in 2014, home values are expected to rise an additional 15.6%, more than any of the other largest 30 housing markets except for Riverside. The metro area’s unemployment rate of 9.6% as of February was still considerably higher than the national rate of 7.7%.

Also Read: America’s Fattest Cities

4. San Francisco, Calif.
> Change in home value: 21.4%
> Current home value: $563,200
> Bottom in home value: Q1 2012
> Forecast change in home value: 10.5%

San Francisco’s home values rose by 21% last year, with 6.4% growth between the fourth quarter of 2012 and the first quarter of 2013. This was among the largest quarterly increases of all large metro areas in the country. The median home value in San Francisco was $563,200 as of the first quarter of 2013. And the growth in home values is expected to continue — by an additional 10.5% in the next year. The unemployment rate in the San Francisco metropolitan area was 6% in February, a significant drop from the 7.5% in the same month last year.

3. San Jose, Calif.
> Change in home value: 22.1%
> Current home value: $676,100
> Bottom in home value: Q3 2009
> Forecast change in home value: 9.7%

The housing market in the San Jose metropolitan area bottomed out in the second quarter of 2009, significantly earlier than the other metro areas on this list. Since then, home prices have increased a great deal. As of the first quarter of this year, San Jose’s median home value of $676,100 was more than any of the other largest metro areas in the country. The unemployment rate in the San Jose area has declined from 9.2% in February 2012 to just 7.6% in the first month of 2013. Construction jobs in the San Jose area grew by 12.3% from February 2012 to February 2013, likely a positive sign for the local housing market.

2. Las Vegas, Nev.
> Change in home value: 22.3%
> Current home value: $138,800
> Bottom in home value: Q1 2012
> Forecast change in home value: 7.5%

Las Vegas’s housing market has made a rapid comeback, with home values rising more than 7% in the most recent quarter alone. While values are on the rise again, it may take some time for the area to return to prerecession levels. Between the peak in the first quarter of 2006 and the third quarter of 2012, home prices plunged a whopping 59%, more than all but five other metro areas out of the 339 measured by Fiserv. As the housing market has started to rebound, jobs have come back as well. Las Vegas’s unemployment rate of 9.8% as of February — while still considerably higher than the national rate — was a significant improvement from the 12.1% unemployed in the same month of 2012 and the high of 14.6% back in July 2010.

Also Read: The Most Popular Home Improvements

1. Phoenix, Ariz.
> Change in home value: 24.0%
> Current home value: $165,600
> Bottom in home value: Q3 2011
> Forecast change in home value: 10.6%

No other metropolitan area’s housing market has grown faster than Phoenix, where home values rose 24% over the past year. The growth is expected to continue as well. Between 2013 and 2014, home values are projected to rise an additional 10.6%. The unemployment rate in the Phoenix metro area was just 6.7% in February 2013, down a percentage point from the same month in 2012. Notably, construction jobs were up 8.2% from the previous year, likely an indicator of a more robust housing market.