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10 Surpising Cities Where Home Values Are Skyrocketing
What are you hankering for when you buy a home? Good space and great bones? You bet. Nice neighborhoods and highly rated schools? Check. Maybe even some awesome shiplap design notes? No prob, "Fixer Upper" obsessives! But when you put all of those different factors into a grinder, there's one thing that comes out the other side: price appreciation.
After all, your home is your biggest investment and most significant asset. Is it increasing in value—and if so, by how much?
We're not simply talking about whether you live in one of America's Hottest Markets, the designation we bestow each month based on high demand and low time-on-market. That's a list owned by tighter-than-tight cities like San Francisco, where prices are already nosebleed-high and teardown shacks get snapped up in days. No, we're talking about the ones where the prices just keep going up and up—metros delivering some dizzying returns on investment in recent years.
Residents of "flyover country," your time has come! For years, you've listened to your East or West Coast pals complain/brag/babble about soaring home values and bidding wars. It turns out that the cities increasing most in value are actually more often found smack-dab in the middle of the affordable American heartland. (Make that affordable for now.)
“Price growth continues to spread into the last remaining affordable pockets in the country,” says Javier Vivas, director of economic research for realtor.com. “Strong double-digit appreciation is more common in less expensive markets, so it's not surprising that half of these markets are in the Midwest.”
Many of the places that made our list are former manufacturing towns that initially lagged behind the national recovery. Once their job markets hit their stride, home demand and values there have jumped as well. Cue bidding wars and escalating price appreciation!
We analyzed the increase in the median listing prices in the nation's top 300 metros between September 2014 and September 2017, using realtor.com data. We looked at percentage change, not total dollar increase, over one, three, and five years. Because a $50,000 increase in Boston, where median prices are $489,500, isn't as big a deal as a $50,000 jump in Cincinnati, where median prices are $227,400. Now that's a big deal.
1. Omaha, NE
Median home list price: $259,400
1-year percentage change: 20.7%
3-year percentage change: 62.1%
5-year percentage change: 73.5%
When you think of the Midwest, a few characteristics might come to mind—like maybe a slower pace of life. But you’re crazy if you think this applies to the Omaha housing market. It’s running at warp speed right now.
“I thought it was great last year, but it's on fire this year,” says Judy Dooley, a real estate agent at Nebraska Realty in Omaha.
If you're hoping to get a home here for under $250,000, you'd best be quick. That might surprise home buyers who might have balked at the median home listing price of $160,000 back in 2014. Ah, memories. These days, there are more buyers than sellers.
And that's because the Omaha economy has come roaring back, thanks to job growth in both the health care and financial sectors. It helps that the region is home to Fortune 500s like Berkshire Hathaway, Union Pacific Railroad, and Kiewit Corporation. In September, the region's unemployment rate stood at just 2.6%. Heck, even Yahoo has an office here.
Median home list price: $1,363,000
1-year percentage change: 20.9%
3-year percentage change: 59.6%
5-year percentage change: 95%
Located along the lush California coast, Santa Maria is by far the most expensive housing market that made our list. This region, which includes Santa Barbara, just keeps moving upward in home in home values, no easy feat. Three years back, homes here were already in the $800,000 ballpark. Now the price of the median home exceeds $1.3 million. Wow.
This isn’t your run-of-the-mill American housing market. The metro, just north of Los Angeles, is where Ellen DeGeneres just snagged a $18.6 million beach home, joining neighbors like Mila Kunis and Ashton Kutcher, who purchased in the area this year. But there's much more to this place than celebrity watching. As indicated by its co-starring role in "Sideways," the pinot noir is quite nice, too.
Median home list price: $327,600
1-year percentage change: 10.7%
3-year percentage change: 59.4%
5-year percentage change: 82.9%
It gets real old when a buddy retells the same story again and again. But that’s not the case when it comes to the tale of Charlotte’s growth—a story that just keeps adding new chapters. This place has been on a steady growth track for years now, helped in no small part by Charlotte’s thriving financial center, anchored by Bank of America’s headquarters. In fact, according to S&P Global Market Intelligence, Charlotte is the third-largest financial hub in the country—and without the high living costs of New York and San Francisco. No wonder millennials are flocking here in droves.
So it shouldn’t be a surprise that home values are skyrocketing—and that the relentless valuation growth of recent years has slowed. Finding an affordable home now can be a challenge.
Lexie Longstreet, a real estate broker with Savvy + Co. Real Estate, has watched the market really heat up recently.
“A few years back, a brick ranch with hardwood floors and one and a half bathrooms that is near downtown in a cute, nice, and safe neighborhood, would go for around $200,000,” Longstreet says. “That same house is [now] $300,000."
The only properties left in the $200,000 price range often need quite a bit of work—or will receive multiple offers that drive the price ever higher, she says.
That’s pushing folks a little farther out into the suburbs. And as home prices in Charlotte tick upward, so do the lengths that buyers go to afford down payments.
“They are either tapping into 401(k)s to get a down payment or borrowing down payments from parents or aunts, or settling and buying less [home],” Longstreet says. “And multiple offers are causing buyers' fatigue.”
Median home list price: $249,900
1-year percentage change: 8.7%
3-year percentage change: 56.4%
5-year percentage change: 72.5%
Sure, this old industrial town's recovery got rolling later than many other cities'. But spurred by a growing health care sector, Grand Rapids is going strong. In fact, Headlight Data, an Austin-based workforce development firm, calculated job data and determined that Grand Rapids had the fastest job growth in the United States last year.
And young professionals have taken notice. Who can blame them, with all the high-rise apartments, condos, and lofts being built downtown? Did we mention the Grand Rapids craft beer scene? The city even calls itself "Beer City USA."
The city isn't afraid to go big. Just last month, it submitted a 108-page pitch to Amazon recommending why it should move its $5 billion second headquarters to the region.
Median home list price: $314,900
1-year percentage change: 2.4%
3-year percentage change: 55.5%
5-year percentage change: 85.3%
Back in 2014, home shoppers in the College Station region could easily stumble upon an affordable home that checked all the boxes and quickly make it theirs, says Nathan Cook, a broker associate at BCR Realtors.
“At that time, 90 days on the market was par for the course,” Cook says.
Oh, the blissful bygone days of a buyer’s market! Now, the script has flipped, and sellers hold the power. It isn't rare to see a well-priced home be sold in five to 10 days, and bidding wars are not uncommon, Cook says.
College Station is located between two of America's strongest housing markets, Austin and Houston. It also benefits from the region's overall booming economy and the growing presence of Texas A&M University. Heck, the research university has nearly 70,000 students—the size of some small cities—making its student body the largest in the country.
Median home list price: $269,900
1-year percentage change: 14.9%
3-year percentage change: 53.1%
5-year percentage change: 61.7%
These days, it’s not just the University of Kentucky Wildcats basketball team scoring points in Lexington. Its housing market—everything within reach of Lexington, all the way to the nearby state capital, Frankfort—is on a tear.
So what’s the formula for the region’s success? Jobs and a steady stream of Wildcats being released into its urban jungle.
“Lexington really benefits from the University—a major research center—bringing in a constant flow of students. A lot of those students choose to stay and contribute to the local economy,” says George Ratiu, managing director of housing and commercial research for the National Association of Realtors®.
Median home list price: $274,500
1-year percentage change: 9.8%
3-year percentage change: 52.5%
5-year percentage change: 62.4%
The New Orleans housing market endured an epically rough stretch. First, it was hit by Hurricane Katrina in 2005, which left 800,000 homes damaged or destroyed. Later that year came Hurricane Rita. And then, by 2008, the housing bubble had popped. Few places were harder hit by the crash.
But that was then. Following Katrina, the federal government, the state of Louisiana and nonprofits combined to pour billions into rebuilding homes. The city's historic neighborhoods have been prime beneficiaries: Among the areas experiencing the largest price increases are the Marigny district and the French Quarter. And construction is booming again in downtown. Right now, developers are starting to plan a $360 million renovation of the city's own World Trade Center building into a Four Seasons hotel and 76 luxury condos.
All of that is pushing huge price surges. In 2015, the median home on our site was listed at $199,900 in New Orleans. That figure now stands at $274,500.
Median home list price: $176,100
1-year percentage change: 22.5%
5-year percentage change: 67.9%
Fort Wayne ranked No. 4 on realtor.com's September ranking of the country's hottest housing markets, after San Francisco, San Jose, and Vallejo. In fact, it was the only non-California metro to crack the top 9.
And that's just further proof that this housing market has gotten Spanx-tight in just a few years. "It's getting harder for buyers to purchase their perfect home or one that matches all their criteria," says Ryan Dollens, an associate broker at Imagine Real Estate. "I’ve seen quite a few [home listings get] multiple offers." This wasn't the norm just a few years back.
The hottest parts of Fort Wayne are in its northwest and southwest regions. Dollens says there's been a particular focus on building condos near Parkview Field, where Fort Wayne’s minor league baseball team plays.
9. Columbus, OH
Median home list price: $241,300
1-year percentage change: 27.1%
3-year percentage change: 51.3%
5-year percentage change: 66.4%
If you look at a map, you’ll notice that Columbus appears to be in the geographical center of the Rust Belt. But don’t tell these Ohioans that. They'd prefer to think of themselves as the center of everything. And who can blame 'em? The housing market here is anything but rusty.
What’s driving the demand? Well, good old paychecks. The region’s economy is bustling, anchored by the likes of Fortune 500s like Cardinal Health, Nationwide Mutual Insurance Co., and L Brands—owner of Victoria's Secret and Bath & Body Works. Those jobs are making Columbus a destination for professionals across the Buckeye State and the Midwest.
Columbus has attracted the hipster crowd (we hear the Victorian Village neighborhood near downtown is one of their favorites) and empty nesters alike.
10. Nashville, TN
Median home list price: $359,900
1-year percentage change: 10.8%
3-year percentage change: 49.1%
5-year percentage change: 89.4%
Music City, U.S.A., is hitting all the high notes. Millennials are flocking here for bachelorette parties and staying for the jobs. It has one of the nation’s highest entrepreneurship rates. And it has solidified its stature as a cultural hub—and not just for country music.
“All of the stars have aligned for Nashville,” says Brian Copeland, a real estate agent at Village Real Estate Services. “It's not just housing."
But real estate is certainly a big part of the surge. The city has made it onto realtor.com's ranking of the hottest markets for the past three months. Earlier this year, Ten-X Research, a real estate research firm, named Nashville the hottest single-family housing market in the country. But as everyone knows, when a housing market starts humming, those looking to make a buck start moving in too.
“In Nashville, we’re seeing a lot of builders, a lot of commercial properties going up everywhere—and a lot of flippers," Copeland says.
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