California, South Top 2019 ‘Hot’ Markets; Pockets of Affordability Scarce
San Jose, Calif., emerged as the nation’s “hottest” housing market last year. It’s not giving up the title.
With a median home price of $1.251 million, San Jose easily claimed the title as most expensive and most competitive housing market for the second consecutive year, according to Zillow Inc., Seattle, even as the market shows signs of shifting.
But Zillow noted the South is drawing new residents seeking affordability and jobs in some up-and-coming tech markets. Meanwhile, a separate report from Redfin, Seattle, said home buyers looking for more affordable communities in which to live can still find them on the coasts, but it might require some creativity in finding them.
Zillow based its report on places where it expects home values and rents will outpace the nation in 2019, strong income growth, good job opportunities with low unemployment rates and a growing population. It said San Jose has the lowest unemployment rate and the most jobs per person among the 50 largest U.S. metros, along with the highest home values and forecasted home-value appreciation. While other West Coast markets–most notably Seattle–have slowed down,
“San Jose continues to see double-digit home value growth. It has led the country for home value appreciation, which it should do again during the early months of 2019, though the market is doubtlessly facing headwinds,” Zillow said. “For-sale inventory in San Jose has doubled in recent months, but remains tight. It also ranked highly for income growth, with the typical household income growing by 6.8 percent.”
Zillow said five of the hottest markets are in the South, where housing is more affordable, drawing in new residents. Median home values in Jacksonville, for example, are one-sixth what they are in San Jose, and rents are about one-third the price. Orlando had the biggest population increase of the hottest housing markets, up 2.8 percent. The top 10 also includes Denver, Atlanta, Minneapolis, San Francisco, Dallas, Nashville and San Diego.
“Silicon Valley’s white-hot jobs market has propelled the region’s housing market – which we expect to continue into the early months of 2019, but there are some signs that the trend is away from the West Coast and toward the South and Southeast,” said Zillow senior economist Aaron Terrazas. “Affordability is attractive–for both young professionals and booming businesses, earning markets like Orlando, Minneapolis, Dallas and Nashville top billing in 2019.”
Affordability is indeed the keyword, Redfin said. Its Hottest Affordable Neighborhoods report notes while expensive coastal hubs remain the most coveted places to live, neighborhoods in Baltimore and Philadelphia are gaining popularity as the most desired affordable neighborhoods in 2019.
Redfin said Baltimore and Philadelphia are two metro areas that are often considered affordable alternatives to Washington, D.C. and New York. Neighborhoods in Chicago, the Portland, Oregon and Boston metro areas and San Antonio also show up in the rankings.
“A lot of people are moving away from the city center into places that feel more like suburbs,” said Redfin agent Rebecca Hall. “They’re moving to areas that don’t feel as dense; they have more of a neighborhood feel and that’s really appealing to homebuyers. You can get larger single-family homes rather than the row houses Baltimore is known for, and they’re less expensive. Some of these pockets are also known for desirable charter schools.”
Redfin’s Top 10 affordable neighborhoods list is led by McKinley Park in Chicago, where the median sales price is $270,000. “Homebuyers are flocking to McKinley Park because it’s just south of Pilsen, which is one of the trendiest neighborhoods in the country, and it’s just west of long-established Bridgeport. People who are priced out of Pilsen are looking in McKinley Park,” said Redfin agent Niko Voutsinas. “People who live there have have excellent connectivity to downtown because it’s right off the L and the expressway.
Other affordable neighborhoods targeted by Redfin:
–East Mount Airy, Philadelphia
–Parkville, Baltimore
–Hamilton, Baltimore
–Fircrest, Vancouver, Wash.
–Bustleton, Philadelphia
–Linthicum, Baltimore
–Lowell, Boston
–Fox Chase, Philadelphia
–Beacon Hill, San Antonio
