Cities where home prices rose the fastest in 2017

If you’re an urban dweller in the United States, then you are more than likely seeing property values go up all around you. This is great when you already own property — not so much when you’re trying to get into the market.

In 20 key U.S. cities (that make up the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index), housing prices were up an average 6.4 percent year-over-year in October, according to the newest numbers released by S&P CoreLogic Case-Shiller.

“Home prices continue their climb supported by low inventories and increasing sales,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. He notes that home prices are increasing at a rate roughly three times the rate of inflation.

“Underlying the rising prices for both new and existing homes are low interest rates, low unemployment and continuing economic growth.

But the spread between the least and greatest annual increases in housing prices is enormous — ranging from a modest 3.1 percent to nearly 13 percent.

Here’s how the cities ranked, beginning with the most tepid price growth and proceeding to the most sizzling hot:

Cities where home prices rose the fastest in 2017
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Cities where home prices rose the fastest in 2017

20. Washington, D.C.: 3.1 percent increase 

 When housing prices were clobbered by the recession in 2007, home prices in the nation’s capital were affected, but not as dramatically as in many other cities. They have recovered — and then some — since the end of the recession, but the recovery like the decline has been modest. Nonetheless, D.C. is an expensive place to live. The median list price per square foot in Washington, D.C., is $515, according to Zillow. (FYI, that’s more than double the price per square foot in the next city on the list.)

19. Chicago: 4.1 percent

Chicago’s housing market is moving doggedly upward. But that could change if the city were to win the competition (with some 200 other cities) for Amazon’s second headquarters, which is expected to employ some 50,000 people.

Want to learn more about Amazon’s next move? Read: “These Cities Are the Contenders for the Next HQ — and 50,000 Jobs.”

18: Miami: 4.4 percent

Miami is grappling with a shortage of housing in the $250,000 to $600,000 range, which makes it difficult for middle-class wage earners to buy a home, according to the Miami Herald. The Florida city has unique factors that make this problem even more pronounced than in other American cities, according to the report:

The amount of available land is limited by the Everglades to the west and the Atlantic Ocean to the east, and foreign investment in the condo market has driven up home prices well beyond what most locals can afford.

17. Cleveland: 4.7 percent

Prices are on the rise in Cleveland, but this major city on the shore of Lake Erie is still one of the most affordable metropolitan areas in the country. Forbes ranked it 16th among 100, based on several factors, including average salaries and housing prices.

16. Atlanta: 5 percent

Despite reaching the highest home prices the city has ever seen, Atlanta remains a relatively affordable place to live. According to Curbed Atlanta, it’s still possible to get an average home in the metro area with an annual income of $43,000. (Compare that to No. 4 on this list!) The city is also among the dozens of candidates vying for’s second headquarters — a decision which will surely have a profound impact on housing prices in the winning city.

15. Minneapolis: 5.4 percent

Demand for homes in the Twin Cities has outstripped supply, especially in the lower- to middle-price range, as HomeMSP (a Re/Max Real Estate agency) explains in an analysis. The shortage has driven prices relentlessly higher, but the rate of increase has tapered off a bit since the summer. HomeMSP attributes the shortage to a number of factors. Among them:

About half the homes sold [in] 2009-2012 went to investors … many are renting them rather than selling them.

14. New York City: 5.9 percent

Yes, home prices are climbing in New York City — although that rate remains just below the 6.4 percent increase for the 20-city composite overall. In fact, as of July, according to Forbes, citing Fitch Ratings, prices could stand to rise more:

The New York metropolitan area is undervalued by 10.4 percent, says Fitch. Home prices in the region, already some of the highest in the country, grew 5.3 percent year-over-year. However, New York incomes are high and growing — as are rents — making ownership relatively more attractive.

13. Phoenix: 6 percent

 Speculation and overbuilding set Phoenix up for one of the most disastrous implosions of the 2008 housing crisis. It had a long way to come back, and the price increases of recent years have been dramatic. But the rate is rapidly tapering, as Zillow illustrates in its charts. At the end of November, Zillow predicted a modest 3.9 percent increase for home prices in the Arizona desert city in the coming year.

12. Charlotte: 6.4 percent

The rise of home prices in this North Carolina city is precisely the same as the 20-city composite as a whole — 6.4 percent.

11. Los Angeles: 6.5 percent

Home prices in Los Angeles are continuing to climb, but, according to Curbed Los Angeles, they haven’t quite reached the stratospheric heights of 2007, on the eve of the housing crash.

Of course, on the high end, when money is no object, there are few places like Los Angeles. At the beginning of December, Curbed reported what could turn out to be the most expensive house sale in L.A. history — for a Malibu beachfront mansion priced at $120 million.

10. Tampa: 6.9 percent

Home prices are still increasing, but the pace of that increase is slowing in this Florida city. In November, Zillow predicted property here will appreciate 3.8 percent through November 2018.

9. Boston: 6.9 percent

Boston’s housing market has been booming, but Curbed Boston anticipates it will cool, citing changes to the U.S. tax code that will be a blow to homeowners in Massachusetts:

An elimination of, or a cap on, the mortgage interest deduction, especially for more expensive homes, could by itself lead to a cool-off in the Boston region’s notoriously red-hot market.

Tax changes such as eliminating the ability to deduct state and local taxes from federal returns could also have prospective homebuyers reconsidering their financial options.

At the same time, the report notes that a growing number of affordable rental options in Boston could dampen the demand to buy homes.

8. Portland: 7.1 percent

Portland offers an astonishing number of coffee shops, bars, bottle shops and breweries —- as documented by Business Insider — as well proximity to the ocean, mountains and wilderness , so it’s a magnet for millennials. But the rush to the city (to the chagrin of many long-timers) and the pressure on the housing market can also be traced to other factors:

The offbeat way of life and beautiful outdoors scene are two of the biggest draws for transplants, but those aren’t the only reason people are flocking here. Portland’s alluring lifestyle happens to coincide with its booming economy, and relative affordability — a formula for mass migration.

The Pacific-facing city of Portland, and the next two cities on the list, one in the Midwest and one in the South, all registered home price increases of 7.1 percent year-over-year.

7. Detroit: 7.1 percent

Prices are rising at a brisk pace in this struggling industrial city, though they have a long way to go. According to Forbes, Detroit is the single most undervalued housing market in the country, just ahead of New York City. Says Forbes:

If you’re short on money but long on time consider Detroit. Housing is cheap in the Motor City and recovery is always just beyond the horizon. Meanwhile, economic fundamentals suggest home prices in the New York area have room to grow–but affordable they are not.

A couple hundred thousand dollars won’t buy you a closet in New York City, but it would buy a grand home in Detroit’s historic district.

6. Dallas: 7.1 percent

The Dallas-Fort Worth area had a strong recovery from the recession and housing prices reflect that, but the pace of construction has helped relieve some of the pressure on the market, according to the recently released 2018 National Housing Forecast. The report, by, projects home sales in Dallas and several other southern cities to grow at a pace of 6 percent while home sales nationally grow about 2.5 percent:

The majority of this growth can be attributed to healthy building levels combating the housing shortage … With inventory growth just around the corner, these areas are primed for sales gains in years to come.

5. Denver: 7.2 percent

CNN reports that an influx to the city of people with well-paid high-tech and oil jobs have put pressure on home prices, which have been surging since 2011. Meanwhile, home building has failed to keep pace, because of a shortage of construction workers and other factors, the report said. For many lower-income workers, both rent and homeownership are out of reach in Denver.

4. San Francisco: 7.7 percent

If you’re an average Joe hoping to live in San Francisco, the news is bad and getting worse, still. To afford a home in the city — meaning you should not be spending more than 30 percent of what you earn on a monthly house payment, you need a household income of at least $170,000, according to a calculation by Curbed San Francisco. Looked at another way, San Francisco property sells for about $1,000 per square foot, according to Zillow.

3. San Diego: 8.1 percent

San Diego is yet another market where housing prices have been outpacing wages for years. The San Diego Union-Tribune looked into the various reasons that construction of affordable housing was not keeping up with demand and found that among the biggest obstacles were “anti-growth sentiments and lack of land zoned for housing.” New construction tends to focus on high-end homes and rentals, according to the report:

If it takes as much time to entitle and build a $1 million luxury home as a starter home selling for $300,000, a builder logically would gravitate upscale to cover overhead costs and eke out a 10 percent profit, the number local real estate consultant Gary London said is what developers and their lenders expect.

2. Las Vegas: 10.2 percent

The Nevada gambling mecca has seen persistent increases in housing prices — it saw the second-highest increase year-over-year of the 20 composite index cities. According to a Nevada Public Radio report, many Las Vegas properties are overvalued, but prices continue to rise because of a lack of inventory. The explanation: A large number of Las Vegas properties are owned by investors, who snatched them up at bargain prices during the housing crisis and now would rather rent them out than sell, and many other owners who are underwater on their homes, making them difficult to sell.

1. Seattle: 12.7 percent increase

Seattle’s housing supply is under enormous pressure from growth — especially driven by the influx of high-income Amazon employees and foreign investment. Prices grew last year at the nation’s fastest pace — 12.7 percent. Though the city is still not the nation’s most expensive place to live, it is certainly too expensive for many people. Seattle is grappling with a large population of homeless people who can’t afford to rent, never mind own property.



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