By The Editors
Seattle, Portland, Nashville, Palm Beach County and Fort Lauderdale took the top spots on Ten-X’s recently released Top Single-Family Housing Markets Report for Spring 2016. These markets have displayed the most consistent combination of rising home prices, home appreciation, favorable affordability and excellent economic and demographic conditions for future demand, according to Ten-X, which ranked the nation’s 50 largest housing markets according to current and forecasted housing fundamentals.
Of the top five, Seattle has now claimed the top slot three reports in a row. Portland also remains unchanged as the second hottest market. Meanwhile in Florida, Fort Lauderdale dropped from second to fifth place and Palm Beach County jumped up a few spots to land in fourth. And Nashville, ranked third, returns to the top five for the first time in a year, Ten-X said in a news release.
Ten-X’s announcement went on to say:
Both Seattle and Portland represent the dominance of the Pacific Northwest driven largely by the technology sector, as local economic strength and healthy demographic trends continue to support burgeoning housing markets in their recent climb past prior peaks. On the opposite coast, Palm Beach County and Fort Lauderdale embody the ongoing recovery effort seen in many Florida markets, leaving ample opportunity for future growth as housing fundamentals remain below pre-recession levels. After experiencing its own recessionary downturn—albeit on a smaller scale—Nashville is seeing local home prices explode due to economic expansion and rising population growth.
“We’re continuing to see a return to fundamentals driving the housing market, as cities with above-average population growth and job creation are recovering much more rapidly,” said Ten-X Executive Vice President Rick Sharga. “The solid tech sector has helped cities like Seattle and Portland maintain strong economic growth, which in turn has helped fuel the housing market, and the Florida housing market continues its post-recession recovery with South and Central Florida cities experiencing explosive growth.”
Top Five Markets at a Glance
|Market||Home Price Growth,
Year over Year
|Home Sales Growth,
Year over Year
|Palm Beach County, Fla.||14.1%||2.0%|
|Fort Lauderdale, Fla.||8.0%||1.7%|
Seattle’s economy is surging with local payrolls up 3 percent from a year ago, and the metro’s large tech base thriving with a 5 percent gain over the same period. Local population growth has outpaced the U.S. rate for the past decade, most recently measuring 1.7 percent, or more than twice the national average. Seasonally adjusted median sales prices for homes in the metro measured nearly $425,000 in the fourth quarter—an all-time high that marks a 12.1 percent increase from a year ago. Though affordability could become an issue in the future, home prices remain competitive within the metro and the Seattle housing market should continue to see healthy demand.
With employment at a new high some 7.2 percent above its prior peak coupled by unemployment declining to 4.8 percent (just below the national average), Portland continues to build on an economic upswing. The metro’s largest sector, professional/business services, saw job growth accelerate to a 7.1 percent year-over-year gain, measuring a whopping 21.5 percent above its prior peak. Seasonally adjusted median home sales prices are up 12.4 percent from a year ago, reaching $331,000 in the fourth quarter. Similar to Seattle, cheap apartment rentals are challenging affordability, but overall strong population growth—surpassing the U.S. average for the past 10 years—should spur a further increase in housing demand.
Driven by significant gains from its key sectors, Nashville has enjoyed strong economic drivers in arenas like education/healthcare services, with seasonally adjusted payrolls gaining 3.9 percent from a year ago. A flurry of downtown construction projects has led to a boom in the industry, during which employment grew 6.2 percent—that’s 3 percent higher than last year and 14.3 percent higher than its prior cyclical peak. Seasonally adjusted median prices stand at $210,200, up 11.6 percent over the past year and 23.6 percent above their prior peak. While the pace of new building has aroused concern that it could lead to overbuilding, local homes have remained affordable, and the area’s population gain at 1.9 percent in recent years is more than double the U.S. rate, trending toward continued growth in its single-family housing market.
Palm Beach County
Though its pace has slowed slightly from its 2014 run-up, the Palm Beach economy keeps improving with seasonally adjusted employment increasing 2.5 percent from a year ago, and its professional/businesses services sector catching fire as payrolls rose 6.7 percent. The outsized financial services sector, however, took a nosedive in 2015 as payrolls declined 4.5 percent, and the equally important leisure/hospitality sector saw its year-over-year growth cool by 2.1 percent amid job losses. Still, the Palm Beach housing market is hitting its stride as home prices netted a 14.1 percent year-over-year gain, the second highest among major U.S. metros in the fourth quarter. The fact that single-family affordability outweighs local apartment rentals should maintain a healthy demand, and seasonally adjusted median home sale prices of nearly $247,000—about 18 percent below their prior peak—bode well for future growth.
Having erased the devastation of the deep downturn that accompanied the housing bust, Fort Lauderdale has bounced back with strong economic resilience and local employment up 3.1 percent from a year ago. Professional/business services in particular, its largest sector, saw employment rise by an impressive 7.7 percent in the past year. The Fort Lauderdale housing market continues to march ahead, with seasonally adjusted median sales up 8 percent to $226,000. Prices are still 22 percent below their prior peak, however, indicating there is additional room to advance. While permit activity has been flat, suggesting that housing inventory will remain tight through the near future, affordability still favors single-family purchases over apartment rentals for the metro, which should inspire a further shift to homeownership.
“Despite a few economic headwinds, the U.S. housing market remains on solid ground,” said Ten-X Chief Economist Peter Muoio. “There are still some causes for concern, such as affordability and limited inventory, plus mortgage availability is still tight. But overall home sales should continue to prosper on the strength of fundamentals. Wages have gone up, interest rates are still low, and the labor market is healthy.”
Market Rankings and Methodology
Sales and pricing activity on the Ten-X platform provide real-time insight into buyer demand and price appetite, particularly among real estate investors. Combining past and current trends with its economic and demographic growth forecasts, Ten-X has ranked the largest 50 metros for performance potential.
The rankings take into account pricing, sales, permit activity and economic growth. Population growth is also considered, but it should be noted that the company utilizes annually compiled Census data. Therefore, any softening in demographics over recent months is not reflected.
The full Ten-X listing:
- Palm Beach County
- Fort Lauderdale
- San Diego
- San Francisco
- San Jose
- Orange County
- Salt Lake City
- Las Vegas
- Los Angeles
- San Antonio
- Fort Worth
- Kansas City
- Long Island
- Northern Virginia
- St. Louis
- Northern New Jersey
- Suburban Maryland
- Central New Jersey
Ten-X is among the nation’s leading online real estate marketplaces and is the parent to Ten-X Homes, Ten-X Commercial and Auction.com. To date, the company has sold more than 200,000 residential and commercial properties totaling more than $37 billion. Leveraging desktop and mobile technology, Ten-X allows people to complete real estate transactions entirely online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. For more information, visit http://www.Ten-X.com.