Ten Housing Markets to Watch in 2015
By Jed Kolko
As the rebound effect fades and the recovery from the housing bust continues, Trulia's 10 markets to watch have strong fundamentals for housing activity. These include solid job growth, which fuels housing demand, and a low vacancy rate, which spurs construction. We gave a few extra points to markets with a higher share of millennials. These young adults are getting back to work and that will drive household formation and rental demand. We didn't include markets where prices looked at least 5% overvalued in our latest Bubble Watch report. Here are our markets to watch, in alphabetical order:
3. Fresno, Calif.
4. Middlesex County, Mass.
5. Nashville, Tenn.
6. New York-New Jersey
7. Raleigh, N.C.
8. Salt Lake City
9. San Diego
These markets are spread across the country: Boston, Middlesex County (just west of Boston), and New York in the Northeast; Dallas, Nashville, and Raleigh in the South; and Fresno, Salt Lake City, San Diego, and Seattle in the West. No Midwestern metros make the list because they generally have slower job growth and higher vacancy rates than other markets, even though many are quite affordable and prices are rebounding.
In 2015, more markets will settle back into their long-term housing patterns. Fast-growing markets that boomed last decade, collapsed in the bust, and then rebounded are now leveling off. Even the markets that have been slowest to recover and have struggled longest are seeing foreclosure inventories decline and the sales mix moving back toward normal.
At the same time, first-time homeownership, single-family starts, and new home sales won't come close to fully recovering in 2015. But if 2015 brings strong job growth, big income gains, and the long-awaited jump in household formation, then 2016 could be the year when we see a major turnaround in homeownership and single-family construction.
Jed Kolko, Trulia's chief economist, earned a Ph.D. in Economics from Harvard University and provides insight on market trends and public policy to media outlets including Time magazine and CNN.