Monday, January 7, 2013
House Price Explosion: Phoenix Leads U.S. in Median Home Price Gains, Outpacing Red-Hot San Francisco Bay Area
ZipRealty, Inc., the leading online technology-enabled residential real estate brokerage company, has released MLS data showing that Phoenix median home prices have increased more than any other market in the U.S. on a year-over-year basis.
Median home prices rose 36 percent in the Phoenix MSA from November 2011 to November 2012. The Silicon Valley recorded the second-highest price increase during that time at 30 percent, while Tampa prices rose 26 percent. Rounding out the list at No. 4 and No. 5, respectively, were San Francisco’s East Bay and the city of San Francisco, which jumped 24 percent and 23 percent, according to MLS data.
Phoenix median home prices increased from $116,000 to $158,000 from November 2011 to November 2012. “There are likely a few different factors contributing to this surge, including decreased housing inventory, lower unemployment numbers, high-tech job growth, steady population gains and increased investor activity, especially from out-of-area buyers,” says Lanny Baker, Chief Executive Officer and President of ZipRealty, Inc.
With investors acquiring foreclosures and the mortgage delinquency rate declining, the inventory of distressed homes in Phoenix has decreased. “As a result, many buyers –especially first-time buyers – are being priced out of the existing housing market, and turning to newly built properties. To meet this new demand, developers have acquired large tracts of land to build new homes,” notes Daniel Leboffe, Director of Agent Development at ZipRealty.
Leboffe observes that, once again, strong interest from out-of-area investors has impacted housing prices in Phoenix. “Out-of-area investors have ramped up home buying activity during the past three years or so, which has placed upward pressure on prices,” he says. “Because of the mild local weather, relatively cheap cost of housing and favorable currency exchange, Canadians have been a notably active segment of the local market. They typically pay cash and actively purchased foreclosed homes for both investment and as second homes, which helped relieve market distress,” he shares.
Home prices in the western region of the U.S. and Florida strengthened in November, according to the MLS data.
Median home prices in California’s Silicon Valley jumped from $420,000 to $545,000 (30 percent) as of November 2012. Tampa prices increased from $100,000 to $126,000, a 26 percent increase, while home prices in San Francisco’s East Bay rose from $290,000 to $360,000 (24 percent). Properties in San Francisco, which still boasts the highest actual prices in the U.S., grew from $635,000 to $782,000, or 23 percent.