Housing Markets That Will Be Strongest by 2014 1. Washington Biggest home price increase projected in 2014: Bremerton-Silverdale metro
Forecast 4-year price increase: 44.7 percent Current median price: $245,000 Prices to reach trough in: 2010 Q1 Median family income: $69,900 Population: 240,860
The Bremerton-Silverdale area, on Puget Sound's Kitsap Peninsula, has the highest growth forecast of all MSAs in the country, with prices expected to jump 44.7 percent by 2014, according to Fiserv. Cathy Doney, general manger for Reid Real Estate in Silverdale, says the waterfront community has benefited from government employment, which has helped sustain the job market, and attracted buyers looking to live close to Seattle at a lower cost. Washington’s second-strongest market is Tacoma, with a growth rate expected to be 33.1 percent. Prices in the Seattle area are expected to grow 25.5 percent by 2014.
Index used to calculate historical home price changes: Case-Shiller
2. Oregon Biggest home price increase projected in 2014: Bend metro
Forecast 4-year price increase: 33.6 percent Current median price: $144,533* Prices to reach trough in: 2011 Q1 Median family income: $58,200 Population: 158,630
The area around Bend area, in central Oregon's high desert by the Cascade Mountains, has the second-highest four-year growth forecast, 33.6 percent, after Bremerton-Silverdale, Wash. Bend draws home buyers and visitors with its wealth of outdoor recreational opportunities, but its prices have dropped about 40 percent since hitting a peak in late 2006. Fiserv and Moody's Economy.com now expect a rapid recovery starting next year. Greg Broderick, a real estate broker in Bend, says prices have overcorrected and buyers are seeing good value in the market. Homes priced the low hundred-thousand-dollar range "are being snapped up at a furious pace," he says. Still, the area must deal with a higher-than-average unemployment rate, which the BLS says was 13.4 percent in June.
Index used to calculate historical home price changes: FHFA
3. Michigan Biggest home price increase projected in 2014: Detroit-Livonia-Dearborn metro
Forecast 4-year price increase: 33.1 percent Current median price: $51,000 Prices to reach trough in: 2011 Q2 Median family income: $54,400 Population: 1,925,850
Since reaching a peak in 2006, home prices in the Detroit area have fallen 60.5 percent, according to the Fiserv Case-Shiller Indexes. As homes have become more affordable—the median home price in Detroit is lower than median family income—demand is expected to pick up. Prices are forecast to jump 33.1 percent over the next four years. George Moma, a broker with Century 21 Dupont Realtors, says the growing prevalence of short sales over foreclosures will help drive up the median price in the Detroit metro area. He adds that the area is attracting interest among international investors from the U.K., Dubai, Moscow, India, Ireland, and France.
Index used to calculate historical home price changes: Case-Shiller
4. California Biggest home price increase projected in 2014: Napa metro
Forecast 4-year price increase: 31.7 percent Current median price: $355,000 Prices to reach trough in: 2010 Q4 Median family income: $79,600 Population: 134,650
Prices in the Napa area have dropped an enormous 44.6 percent since peaking in early 2006, according to first-quarter 2010 data from Fiserv and Moody’s Economy.com. Despite the drop, home prices are expected to rebound quickly. According to an article in the St. Helena Star, Napa County is vulnerable to economic and real estate market fluctuations, but the impact is mitigated by managed growth and the county’s natural and agricultural resources. The unemployment rate in the Napa area fell to 9.3 percent in June, from 11.1 percent in January, according to the BLS.
Index used to calculate historical home price changes: Case-Shiller
5. Nevada Biggest home price increase projected in 2014: Carson City metro
Forecast 4-year price increase: 31.6 percent Current median price: $141,524* Prices to reach trough in: 2011 Q2 Median family income: $63,100 Population: 55,180
By the second quarter of 2011, prices in the Carson City area are expected to have fallen 34.4 percent from peak levels, according to the Fiserv and Moody's Economy.com. Recovery will depend on job creation, as the unemployment rate was 13.4 percent in June, according to the BLS. While expectations for near-term economic growth have diminished recently and competition for jobs is extremely high, opportunities exist, even in a declining labor market, according to Nevada's Employment, Training, & Rehabilitation Dept.
Index used to calculate historical home price changes: FHFA * Source: John Burns Real Estate Consulting, April 2010
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