Las Vegas will be the hottest housing market in America next year, according to Realtor.com — and not just because the average high temperature is 100 degrees or more from June through August.
Realtor.com analyzed data on home sales, prices, and new construction, as well as local economic factors, population trends, unemployment, and median incomes to determine its top 10 housing markets for 2018. Not a single metro area in the Northeast, Great Lakes, or Pacific Northwest made the cut. A number of the top markets, including Las Vegas, were decimated by the housing crash and have been slower to recover than other cities.
Now, these aren’t (necessarily) the places Realtor.com expects to see the biggest price gains next year. They were looking for growth in both home values AND sales volume — something that’s dwindled in most markets as housing inventory has grown so scarce.
These metro areas have put up a solid record of recent price gains, making them a safe bet for home buyers. But they’re also adding more new construction, which could hold prices in check somewhat and allow more new buyers to jump in.
Realtor.com chief economist Danielle Hale expects home buyers will continue to seek out such pockets of affordability. “A lot of these places are more affordable than surrounding areas, yet still have strong economies,” Hale said. “Even though prices are expected to grow, most of these markets will still remain relatively affordable in 2018.”
In Las Vegas, where the median home price is an attainable $285,045, prices are predicted to rise 6.9% in 2018. With lots of new construction and newcomers hitting the market, Realtor.com expects sales to increase 4.9%.
With companies like Toyota — and their employees — moving into the area, Dallas ranks No. 2 on the list, with projected sales growth of 6% and price growth of 5.6%. The area’s median home price of $339,300 would climb to $358,300 by year’s end if that prediction holds up.
But Dallas buyers are already forking over far more to live in the city limits — upwards of $500,000, according to local broker Yolanda Dittmar. “Most of the houses that are being sold right now are new-built, and the builders can’t keep up,” she told realtor.com.
Other big-name cities to make the list are Salt Lake City (No. 6), Charlotte, N.C. (No. 7), and Nashville (No. 10), as well as Colorado Springs (No. 8), south of red-hot Denver. All of them are fast-growing, attractive markets with lots of jobs and housing prices that compare favorably to places like Seattle, coastal California, or Washington, D.C.
The true surprises are a handful of rather unremarkable satellite cities on the outskirts of bigger metro areas. For example, No. 3 on the list is Deltona, Fla. — which Google Maps assures me is a real place and not just a misspelling of Daytona, Fla. — about 30 minutes north of Orlando. With a median home price of $275,050, Deltona is a lot cheaper than Orlando, and prices are expected to rise 6% in 2018.
On the other side of Disney World, halfway to Tampa, prices are even more affordable in No. 5 Lakeland, Fla. The $224,950 median home price here is predicted to jump by 7% next year.
…and the Always-Bizarro Bay Area
While Sacramento, Calif., has been attracting plenty of priced-out San Francisco buyers, Realtor.com says No. 4 Stockton, Calif., about 90 minutes inland, is becoming the Bay Area’s new real estate release valve. You probably associate Stockton with a less flattering type of city ranking. But at $385,050, the median home price in Stockton is a small fraction of the average $1.3 million price tag in San Francisco. Prices are expected to climb another 6.4% in 2018.
So How Accurate are These Predictions?
If calling Stockton America’s 4th hottest real estate market seems like a bold prediction, it might be.
Last year around this time, Realtor.com named Sacramento and the L.A.-area’s Riverside, Calif., the No. 4 and 5 hottest housing markets for 2017. Both had price growth roughly in line with the national average, and sales in Sacramento actually fell — though at one point in May, sales in Riverside were up 10.9% year over year.
The top three cities on last year’s list were Phoenix, Los Angeles, and Boston, all of which had pretty good years. But Realtor.com missed what was arguably the most supersonic real estate market in America in 2017, ranking Seattle at No. 20 last December.