Among the 50 largest U.S. markets, the top five (in order) were Orlando, Palm Beach County, Fort Lauderdale, Tampa and Dallas, as outlined by Ten-X, an internet based marketplace. Each metro area had “a vigorous blend of consistently strong demand, home price appreciation, and economic and demographic growth.”
Florida features 4 out of the 5 top ‘hottest’ single-family markets
While Florida metros again dominated the rankings, Ten-X said there was movement within the top 5 slots: Orlando jumped from fourth to first to overtake Fort Lauderdale; Fort Lauderdale dropped to third; Palm Beach County remained unchanged in second; and Tampa slipped from third place to fourth.
“While most of the cities at the top of the list share common traits like job growth, population growth and economic expansion, many of the cities showing the greatest potential were among those hardest hit during the Great Recession,” says Ten-X Executive Vice President Rick Sharga. “The top 20 cities in our report include many that were devastated during the foreclosure crisis – especially in states like Florida – and as home prices continue to recover, they still represent buying opportunities for homeowners and investors alike.”
Healthy economic and demographic trends are fueling demand throughout the majority of the Sunshine State, keeping sales elevated and enabling significant price growth. Dallas, for its part, is benefiting from an increasingly diversified economy than most other Texas metros, allowing it to withstand pressures from low oil prices. Las Vegas, still a leader in terms of housing demand, sales and job growth, now ranks ninth.
“The recovery – and future outlook – continue to be very regional. Like Florida, the Southwest, Coastal California and Pacific Northwest are all showing great promise, while the Midwest and Northeast are still struggling,” Sharga says.
Top five markets at a glance
Market – home price growth annually – home sales growth annually
Orlando – 11.2% – 0.2%
Palm Beach County – 12.1% – -0.6%
Fort Lauderdale – 8.8% – -0.9%
Tampa – 10.7% – -0.4%
Dallas – 9.9% – -0.3%
Ten-X research into the top 5 markets
Orlando
The Orlando housing market continues to make substantial strides in its recovery. Metro employment increased 4.1 % year-over-year, supported mostly by its booming leisure/hospitality sector that comprises over 21% of local employment. Payrolls are at an all-time high, some 27% above their prior peak. Home prices jumped 4.4 % this past quarter, eclipsing $200,000 for the first time since 2008. Up 11.2% year-over-year, home prices have outpaced US annual growth for 20 straight quarters, with room for further growth as prices remain 17.3 % below their prior peak. Population growth has exceeded 2 % for four consecutive years, and Orlando’s economic outlook is one of the best in the country.
Palm Beach County
Palm Beach is seeing healthy progress in its housing recovery, though economic growth has markedly decelerated in 2016. Year-over-year employment growth is at 1.5 percent, the lowest annual rate since 2011 and down from the three to five% growth the metro has enjoyed for most of the recovery. Home sales are at a high level, however, some 24% below their bubble peak, indicating more than enough room for additional growth. Seasonally adjusted prices are approaching $270,000 and are at their highest level since 2007, though they remain 11.6 % below their prior peak. This indicates room for further growth. Single-family homes in the metro offer great affordability and are also less expensive than local apartment rentals, which should preserve demand for buying and allow for further price gains. With permit activity still hovering at a low level, overbuilding is far from a concern and Palm Beach’s housing market remains solid.
Fort Lauderdale
Fort Lauderdale’s real estate market continues to thrive in its lengthy recovery from the housing bust. With metro employment up 3.4 % year-over-year, the local manufacturing and transportation/utilities sectors sustained vigorous growth throughout 2016. Leisure/hospitality jobs, a mainstay of the local economy, continue to reach new heights. Home sales are still some 26 percent below their pre-bust peak, largely seeing choppy progress despite contracting last quarter, and home prices have risen 8.8% over the past year to a cyclical high of nearly $245,000. Though annual home price growth has outpaced the US since 2011, prices remain 16.2% below their prior peak, leaving additional room for gains. Fort Lauderdale’s population growth doubled that of the U.S. at 1.4 % in 2015, and continued growth should support the housing market’s ongoing recovery.
Tampa
Tampa’s housing market is marching ahead on its road to recovery, thanks to an economy that continues to enjoy strong job growth and strengthening demographics. Despite cooling during the last couple of months, total employment stands 2.6 % higher than its year-ago level, with job gains in 32 of the past 34 months. Tampa’s largest sector, professional/business services, has witnessed its explosive growth slow in the past year, though payrolls are up 4.6 percent year-over-year. Home prices reached a cyclical high of almost $180,000 and are up 10.7 percent year-over-year, continuing the torrid pace that has outstripped US annual growth since late 2011. Meanwhile, prices are very reasonable in the metro at 12.3 percent below their prior peak, suggesting further room for gains. Accelerating population growth combined with a strong economy should fuel Tampa’s real estate market in the years ahead.
Dallas
Dallas continues to see vigorous growth, notwithstanding the drop in oil prices that are threatening a few other Texas metros. Driven largely by the professional/business services sector, payrolls are up 3.8% from this past year and the city has added jobs in 44 of the last 45 months. Recent job losses within the manufacturing sector are actually slight compared to the rest of the state, keeping unemployment at a low 3.6 percent. Single-family prices are up 9.9 percent from a year ago, reaching an all-time high of more than $215,000. Though prices have risen for 19 consecutive quarters and are generally well above their prior peak, single-family homes remain affordable in the metro, indicating that further price gains are sustainable. Dallas’ population growth in 2015 was almost triple the U.S. average, which bodes well for the future.
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