U.S. Cities With the Largest Turnaround in Home Prices
August 26, 2020 (Investorideas.com Newswire) Over the past two decades, cities across the U.S. experienced intense makeovers. For some residents, such changes have meant rapidly appreciating property values, new jobs, and economic growth. For others, the development surge has led to sharp living cost increases in previously affordable areas.
Nationally, wage growth for production and nonsupervisory workers has lagged behind rising home prices since the early 2000s. According to Zillow, median home prices nationwide nearly doubled between 2000 and 2020, while BLS data shows that hourly wages have only grown by approximately 75 percent. Despite the dip in home prices during the Great Recession, the gap between housing costs and wages has been growing steadily since 2015.
While home prices increased by nearly 100 percent nationally between 2000 and 2020, some of the nation's largest metropolitan areas-especially those in California-experienced increases of more than twice that. Home prices in both the San Jose and San Francisco metropolitan areas grew by more than 200 percent during that time. Further, the median home price in each of these locations currently stands at over $1 million, more than four times the national median of approximately $250,000.
At the regional level, the states with the largest home price increases over the past 20 years tend to be located in the Northeast and the West Coast. Bolstered by rapidly rising home prices in metro areas like San Jose, San Francisco, and San Diego, home prices in California have increased 174 percent over the past 20 years. By contrast, the states where home price increases fall below the national average tend to be located in the South and the Midwest. The three states that experienced the least growth are Michigan (43 percent), Ohio (42 percent), and Illinois (39 percent).
An increase in median home price alone does not necessarily indicate a turnaround, though. To find the American cities that experienced the largest turnaround in home prices over the past 20 years, researchers from Roofstock, a real estate investing platform, analyzed historical data from Zillow. They first identified cities whose home prices were below its parent metropolitan area's median in 2000 and above it in 2020. Then the researchers ordered the remaining cities by their respective percentage change in median home price over that time period.
While most of the resulting cities are located in California and the Northeast, there are several outliers located in Colorado, too. Additionally, the list of cities that experienced the largest turnaround in home prices over the past two decades includes both principal cities-the largest cities in each metropolitan area, such as Denver and Boston-as well as locations that surround them, like Arvada, Colorado and Quincy, Massachusetts.
Here are the 15 U.S. cities with the largest turnaround in home prices over the past 20 years.
For more information, a detailed methodology, and complete results, you can find the original report on Roofstock's website: https://learn.roofstock.com/blog/cities-with-biggest-turnaround
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