Which state real estate markets are doing the best, the worst during the real estate boom? – RISMedia |
(TNS) —Prior to the coronavirus recession, Utah’s real estate market was on fire. Then came the COVID-19 pandemic, which sent residents of northern California and Seattle in search of affordable homes and more space, and an already hot market intensified.
Dave Robison, former president of the Utah Association of REALTORS®, simply summarizes the activity. “This is insane,” says Robison, a real estate broker in Salt Lake City.
Its evaluation is not limited to the sale. Home prices in Utah have skyrocketed as Californians flock to the state. Utah has the fastest pace of job growth in the country, with unemployment at its lowest, extremely low mortgage rates, few defaults, and low local and state taxes.
All of these factors pushed Utah to the top spot in Bankrate’s 2020 Housing Heat Index, a spot it continues to occupy for the first quarter of 2021. Residential real estate has exploded during the recession. coronaviruses, and Utah has become a particularly popular market.
Other states in the region are also booming. South Dakota, Montana and Idaho rank second, third and fifth, respectively, in the Bankrate Index.
At the opposite end of the list is Hawaii, a state that has been hit hard by the COVID-19 pandemic. Its tourism industry is slowly recovering from a virtual standstill, and the employment picture in Hawaii remains bleak.
The 5 States with the Hottest Housing Economies
The Housing Heat Index shows how state real estate markets are faring in the coronavirus-fueled housing boom, and how they might fare going forward.
To calculate the ranking, Bankrate analyzed six data points: the annual appreciation of house prices reported by the House Price Index of the Federal Housing Finance Agency; the share of delinquent mortgages reported by the Mortgage Bankers Association; unemployment and employment growth in the US Department of Labor; the cost of living index of the Center for Regional Economic Competitiveness; and state-by-state tax charges as reported by the Tax Foundation
These five states had the strongest housing economies in the first quarter of 2021:
1. Utah. Its home values jumped 19% in the 12-month period ending March 31, second best among U.S. states, according to the Federal Housing Finance Agency. Utah posted the second highest job growth in the country from March 2020 to March 2021, according to Bankrate analysis of Department of Labor data. Additionally, Utah had the lowest unemployment rate in the country and its tax burden is among the lowest in the country, according to the Tax Foundation.
2. South Dakota. Home prices have climbed nearly 15% and South Dakota is tied with Utah for the lowest unemployment rate in the country.
3. Montana. Home prices have risen 15% in the past year and Montana has the lowest level of delinquent mortgage payments in the country, according to the Mortgage Bankers Association.
4. New Hampshire. The geographic oddity in our ranking, New Hampshire has seen home values soar 16%, and the unemployment rate and tax burden are low.
5. Idaho. Idaho home prices were the highest in the country, climbing 23.7% in the year ending March 31. And job growth is the strongest in the country. However, Idaho’s overall rankings were tempered by mid-range readings for cost of living and taxes, and by a ranking behind the pack in mortgage delinquencies.
Buyers are looking for affordability and space
High rankings of states in the mountain time zone illustrate a shift in the housing market: Americans are still drawn to healthy job markets, but even before the coronavirus pandemic they were increasingly unwilling to pay to live in places like San Jose, Seattle, and Boston.
COVID-19 has pushed many – especially those who can work remotely – to move from more expensive areas to more affordable ones.
“We are seeing the ingredients of a renewed affordability migration,” says Mark Vitner, senior economist at Wells Fargo. “The beneficiaries of this change have largely been the mid-sized subways in the mountainous western states.”
The median price of a single-family home sold in Silicon Valley during the first quarter was $ 1.5 million, according to the National Association of REALTORS®.
The typical price in Salt Lake City was $ 435,400 – above the national median, but not dramatically, and just a fraction of the price paid by residents of Northern California.
The price differential prompted many players in high-cost markets to consider relocating. The concept is particularly appealing to workers who can take up their well-paying jobs in areas with lower cost of living.
“People suddenly have the choice of where they live because they are not tied to a desk,” says Alicia Holdaway, agent at Summit Sotheby’s International Realty in Draper, Utah, and former chairman of the board of Salt. Lake City REALTORS®. “We have a net in migration that has been happening for years and has only increased. “
Each boom brings its drawbacks, of course. In some cases, newcomers to the Utah housing market are overflowing with cash and are ready to push up the prices.
“There is always a setback,” Holdaway says. “We have seen housing affordability become a crisis.
The 5 States with the Coolest Housing Savings
As a nationwide real estate boom rages, every state has seen property values rise in the 12 months that ended in March. However, some state economies are struggling with weak job growth and other challenges. The last 5 of our index:
47. Illinois. High unemployment and lukewarm price appreciation put Illinois at the bottom of the pack.
48. New York. Hard hit by the pandemic, New York is facing many headwinds. It ranks near last in terms of job growth, unemployment, tax burden and delinquent loans.
49. Washington, DC The neighborhood ranked near the bottom of home price appreciation. The city also ranked last in cost of living and near the bottom of the unemployment rate in terms of tax burden.
50. Louisiana. It ranks the worst among delinquent loans, with over 9% of homeowners behind on their mortgage payments. Louisiana is also doing poorly when it comes to price appreciation, job growth and the tax burden.
51. Hawaii. This tourism dependent state ranks last for job growth and unemployment and almost last for price appreciation.
“The big picture is a very weak economy,” says Carl Bonham, executive director of the University of Hawaii’s Economic Research Organization.
To calculate the home heat index for the first quarter of 2021, Bankrate analyzed six data points:
– Annual appreciation of house prices for the first quarter, as reported by the house price index of the Federal Housing Finance Agency
– Share of mortgage loans in arrears for the first quarter, as reported by the Mortgage Bankers Association
– US Department of Labor March Unemployment Rate
– Annual employment growth from March of the US Department of Labor
– The cost of living index for 2020 from the Center for Regional Economic Competitiveness
– State by State tax burdens for the fiscal year 2020-2021 as reported by the Tax Foundation
The index overweight the appreciation of house prices, the measure which most clearly reflects the desirability of a real estate market. And the index is underweighting the cost of living and the tax burden – house prices may skyrocket despite these factors, but a new wave of remote work is making these factors more relevant than they once were. the past.
© 2021 Bankrate.com
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