12 Dec US Home Prices 2018 – House Price Growth by City – Best Bets
US Home Price Predictions
Will we see a big housing market correction, flatten, or begin to pick up in mid 2019 as the China Tariffs begin to force multinationals to move production back to the US? Can you assess a housing market without looking at economic predictions and stock market predictions?
People are asking will home prices rise? Should I buy in 2019, and Should I sell my home? Home prices reflect macroeconomic trends and overall the economy is good. In fact, the December jobs report was fantastic, the lowest rate ever. That means home prices should hold.
Check the health and predictions for major cities: Los Angeles, New York, Seattle, Chicago, Philadelphia, San Diego, Miami, Boston, Bay Area, Sacramento, and Houston. See forecasts for California housing and Florida housing markets.
Reuters polled a number of housing market analysts at the end of a weak month in home sales, and this is still what they believe going forward to 2019:
Pressure Greater for a Resurgence of Home Prices
Experts look at the Case Shiller report on resale home prices for guidance. Their latest chart shows steady upward growth. So although December’s home prices might be declining slightly, the pressure is upward. When you consider the latent demand for housing from Millennials in their family formation years, it would take a big economic shock to push home prices down.
They recently reported that national home prices grew 5.5% annual rate in September. Their 20-City
Composite index rose 5.1% year-over-year. Las Vegas, San Francisco and Seattle reported the highest year-over-year gains among the 20 cities. Las Vegas led the way with a 13.5% gain, San Francisco up 9.9%, and Seattle rose 8.4%.
Home prices are anticipated to increase 3.9 percent and existing home sales are forecasted to increase 1.9 percent to 5.46 million homes. Interest rates are expected to reach 4.5 percent due to higher expectations for inflationary pressure in the year ahead — Realtor.com Research
Freddie Mac Forecast
Freddie Mac points to higher mortgage rates as something that will moderate home prices. The problem with these rate forecasts is their other forecast of lower GDP. If the economic forecast is dire, then interest rates would fall. Higher rates would serve to raise home prices, if the economy hangs in there.
Zillow Home Prices
Zillow provides a helpful snapshot of the market health and average home values in October.
Forisk forecasts solid levels of home construction peaking in 2023 and sustained to 2027, although tailing due to satiated demand and rising interest rates.
- US housing starts rose to a 9 year high in October 2017
- US consumer sentiment rose to a 6 month high
- US durable good orders rose
- Job vacancies to fall 500,000 by 2020
- US GDP will rise 2 Trillion by 2020
From the chart below, the Case-Shiller Home Price Index, building permits, housing starts, home sales, will rise slightly next year and significantly grow to higher levels in 2020. Home prices may rise another 10% by 2020 according to their forecast. Still a good time to look for houses for sale.
Screenshot courtesy of Trading Economics
Case-Shiller also sees the Fed raising interest rates and that US inflation rate will rise. These estimates may not take into account the intent of the Trump government.
And from a reuters news report on the economy, Joel Naroff, chief economist at Naroff Economic Advisers is quoted as saying, “Everything seems to be moving in the right direction in the economy … The weak links are recovering and the strengths are staying strong. The Fed is not going to continue doing nothing.” That would mean he expects the Fed to raise interest rates, and that would push the US dollar to further highs.
Overall, it’s a good report that has something for consumers and entrepreneurs and business. Read the full forecast here.
The US housing market 2017 report is positive and this report from the Urban Land institute is positive too. Sure there are variables, especially in different regions and cities across the US, yet a lowered deficit sends a positive message to startups and small businesses that US businesses will have an easier time competing in the US. Looking to invest in rental income property in 2017?
Best Cities to Invest?
Cross reference this compiled list of cities with a previous post on best cities 2017 to invest in rental property. In this chart with data from Realtor.com and Kiplinger, I’ve highlighted what might be the best cities to discuss with your real estate investment advisor. I’m not advising anything, just to point out the advantages of diversifying your investment portfolio to cities that are strong and ones that could become strong.
Cities such as Springfield MA, Sacramento CA, or Detroit might pay off in 2020 to 2025. For rental income, Silicon Valley, Los Angeles, Dallas, San Diego, and Boston might be best picks. It might be a case of the usual suspects, but start here, work your way to the best zip codes and neighborhoods, types of house, employment growth, and migration patterns of Millennials, and you may have yourself a winner (real estate investment). Who knows which cities will rule after 4 years of the Trump overhaul of the US government and US economy?
|Rank||City||Price Rise||Sales Growth||Average Home Price 2015 – Kiplinger|
|1||San Francisco-Oakland-Hayward, CA||8.41%||1.17%||$700,000|
|2||San Jose-Sunnyvale-Santa Clara, CA||8.26%||1.26%||$816,000|
|5||Los Angeles-Long Beach-Anaheim, CA||6.90%||6.03%||$530,000|
|6||Salt Lake City, UT||6.66%||4.67%||$248,500|
|8||San Diego County, CA||6.47%||4.89%||$460,000|
|10||Providence-RI Warwick, MA||6.31%||4.09%||$224,575|
|15||Atlanta-Sandy Springs-Roswell, GA||5.93%||2.67%||$180,000|
|16||Grand Rapids-Wyoming, MI||5.77%||4.16%||$140,000|
|19||Greensboro-High Point, NC||5.50%||3.56%||$118,500|
|21||Oxnard-Thousand Oaks-Ventura, CA||5.19%||5.35%||$507,500|
|25||Las Vegas-Henderson-Paradise, NV||5.06%||4.57%||$193,700|
|28||Riverside-San Bernardino-Ontario, CA||4.98%||6.88%||$276,000|
|32||Tampa-St. Petes, FL||4.84%||5.10%||$140,400|
|33||Palm Bay-Melbourne-Titusville, FL||4.83%||3.14%||$140,000|
|36||Boise City, ID||4.79%||5.28%||$173,250|
|37||Colorado Springs, CO||4.77%||6.71%||$221,450|
|44||Lakeland-Winter Haven, FL||4.64%||4.89%||$119,950|
|47||New Haven-Milford, CT||4.39%||2.60%||$117,000|
|48||Kansas City, MO KS||4.36%||2.66%|
|50||Augusta-Richmond County, GA||4.28%||4.62%|
|55||Dallas-Fort Worth-Arlington, TX||4.13%||5.09%||$157,000|
|56||Minneapolis-St Paul, MN||4.08%||3.56%||$222,700|
|57||Oklahoma City, OK||4.07%||4.18%||$152,250|
|59||New York-Newark-Jersey City, NY N.J Pa.||3.99%||6.48%||$375,000|
|60||Miami-Fort Lauderdale-West Palm Beach, Fla.||3.98%||4.17%||$210,000|
|61||New Orleans-Metairie, LA||3.95%||5.94%||$153,000|
|63||El Paso, TX||3.93%||2.85%|
|64||Washington-Arlington-Alexandria, DC VA||3.92%||4.60%||$385,000|
|75||Austin-Round Rock, TX||3.50%||7.40%||$225,000|
|76||St. Louis, Mo||3.46%||4.35%||$89,900|
|80||Buffalo- Niagara Falls, NY||3.36%||2.08%||$110,000|
|81||San Antonio-New Braunfels, TX||3.29%||6.22%||$128,494|
|86||Deltona-Daytona Beach, FL||3.10%||8.23%||$135,000|
|89||Little Rock, AK||2.97%||3.59%||$177,000|
|91||Des Moines, IA||2.92%||4.32%||$186,500|
|92||Cape Coral-Fort Myers, FL||2.91%||5.41%||$177,000|
|93||Baton Rouge, LA||2.87%||5.53%||$178,750|
|95||Durham-Chapel Hill, NC||2.55%||8.95%||$156,500|
|Chart Data courtesy of Realtor.com and Kiplinger.com|
US Real Estate Market 2017 to 2020
Take a good look at housing reports including separate ones for the New York real estate market outlook, Los Angeles real estate outlook and the San Francisco Real estate market as key indicators. Some pundits are suggesting California could see a less rosy outlook in the years ahead, but with continued low fuel prices, low interest rates, and eases in regulation at the Federal level, California should fare well economically.
From a report in the Pacific Coast Business Times, Mark Schniepp, director of the California Economic Forecast is quoted as saying that economic indicators do not point to a recession this year or next.
Nationwide, consumer confidence is near a seven-year high and corporate profits are trending up, which slumped prior to the Great Recession. And even though more people are buying cars and homes, household debt levels are tame, said The current seven-year economic expansion is old but it’s not running on fumes, he said.
Schiepp said “We really don’t have any imbalances or bubble concerns. Therefore, at this time, we don’t see any recession — none. If you were wondering about 2017 and all those blogs and articles (forecasting a recession), well forget about them.” Schniepp spoke to an audience at the Hyatt Regency in Westlake Village LA, during the 2016 Los Angeles County and Ventura County Economic Outlook.
The prognosis for housing markets in 2018 is positive
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