It’s ‘2018 Hot Market’ Time

It’s that time of the year, when various housing prognosticators gaze into their crystal balls to say which markets will be hot in 2018, and why.

Redfin, Seattle, said 25 neighborhoods “have it all.” Its analysis of 80 major U.S. markets identify neighborhoods with favorable criteria: affordable homes; highly rated schools; and easy commute; low crime rates; fast home selling speeds; and, most importantly, plenty of inventory.

More than half of the neighborhoods on Redfin’s list of “have it all” neighborhoods are in the Chicago area, “the rare major metro area that has remained relatively affordable and has largely bucked the severe inventory shortage trend seen across much of the country over the past few years.” Neighborhoods in Pittsburgh, Cleveland, San Antonio, Dallas, Houston and Miami also made the list.

“These are places to watch in 2018, when we expect last year’s trend in migration from expensive, high-tax coastal markets like San Francisco, Silicon Valley and New York toward smaller, more affordable cities, to intensify,” Redfin said (https://www.redfin.com/blog/2018/01/25-neighborhoods-that-have-it-all-affordable-homes-highly-rated-schools-an-easy-commute-and-plenty-of-inventory.html).

In a separate report, WalletHub, Washington, D.C., explored the best states in which to put down family roots. WalletHub compared the 50 states across 42 key indicators of family-friendliness, ranging from median family salary to housing affordability to unemployment rate.

The analysis said the best states for families were Massachusetts, Minnesota, New Hampshire, North Dakota and Vermont. Worst states for families were New Mexico, Mississippi, Alabama, West Virginia and Louisiana.

The report said Minnesota has the highest median family annual income (adjusted for cost of living), $80,399, 1.8 times higher than in Hawaii, where it is lowest at $44,295. Utah has the lowest divorce rate, 16.18 percent, which is 1.6 times lower than in Nevada, at 26.57 percent. New Hampshire has the lowest share of families living below the poverty level, 5.3 percent, 3.3 times lower than in Mississippi, 17.4 percent. Mississippi, however, has the lowest average annual cost of early childcare (adjusted for median family income), 6.15 percent, 2.3 times lower than in the New York, 14.12 percent.

New Hampshire has the lowest infant-mortality rate, 4.18 percent, 2.2 times lower than in Mississippi, 9.27 percent. Maine has the fewest violent crimes (per 1,000 residents), 1.24, 6.5 times fewer than in Alaska, 8.04.

The report can be found at https://wallethub.com/edu/best-states-to-raise-a-family/31065/.

Meanwhile, Zillow Inc., Seattle, ranked San Jose, Calif., and Raleigh, N.C. as its hottest housing markets for 2018, followed by Seattle and San Francisco.

Zillow looked for places with quickly rising home values and rental prices, low unemployment rates, steady income growth and strong job opportunities with lots of people moving to the area.

Austin, Texas has the strongest population growth on the top 10 list, at 2.8 percent. Seattle has the highest forecasted rental appreciation, with rents in the metro expected to climb another 3.5 percent over the next 12 months.

Rapid home value growth and a high number of job openings per person are the driving forces behind San Jose’s position at the top of Zillow’s list. The San Jose housing market has been booming for several years, mainly due to people moving to the area for high-paying jobs. While San Francisco home values have recently started to cool, San Jose is off to the races, with home values projected to rise 9 percent in 2018. The median home value in San Jose is over $1 million, and the median rental price is $3,514 per month. Over the past five years, San Jose home values have appreciated 78 percent.

Although Zillow’s list is largely made up of established tech towns, two increasingly hot North Carolina markets also made the top 10 ranking. Income and population growth in Charlotte and Raleigh are among the strongest of all markets on the list. Raleigh anchors North Carolina’s “Research Triangle” and saw a 9 percent increase in income growth last year. In Charlotte, a fast-growing banking center, incomes rose about 9.5 percent over the past year.

“This list shows that just because a market is smaller or more affordable doesn’t mean it isn’t dynamic,” said Zillow senior economist Aaron Terrazas. “Growing cities in the Sun Belt, places like Raleigh, Charlotte and Nashville, offer plenty of opportunities healthcare and finance, while providing a less-expensive, but still-convenient, alternative to the larger and pricier markets in the Northeast. The tech industry continues to roar, attracting thousands of new residents per year to tech-dominant markets like Seattle, Denver and the Bay Area. The higher cost of living in these areas is offset to a large degree by well-paying tech jobs.”

In nine out of the 10 markets on Zillow’s list, home values are expected to rise at a faster pace than the nation overall, with the exception of Denver. Nationally, Zillow expects home values to appreciate 3.2 percent over the next year.