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Realtor.com’s Chief Economist Jonathan Smoke has served up his list for the “Top 10 Hot Housing Markets to Watch in 2015.” And while most of these market choices will come as no surprise to mortgage professionals, a couple of Smoke’s choices are rarely seen in similar industry lists of housing markets with the greatest potential for positive growth.
Going in alphabetical order, Smoke started with Atlanta. While acknowledging this market did not recover from the 2008 crash with the same speed as other major markets, Smoke credited a decent level of affordability coupled with job growth and household growth as fueling the market’s viability.
Dallas was the first of two Texas cities on Smoke’s list, and he predicted a three percent growth in home prices and a seven percent growth in home sales for 2015. Denver came next, with Smoke forecasting a 14 percent increase in home sales in 2015, the largest for any U.S. market, which he credited to a strong local economy and a vibrant job market.
Smoke acknowledged that his next choice, Des Moines, Iowa, might surprise some people, but he pointed to a healthy employment picture and high levels of homeownership among Millennials as evidence that the Iowa capital deserves to be considered as a hot metro market. Not surprising was the second Texas city on the list, Houston, which Smoke observed as retaining its affordability despite recent housing price increases.
Affordability has been a major problem plaguing the first of two California cities on the list: Los Angeles, which has challenged many low- and moderate-income residents. But Smoke predicted that home sales will grow in Los Angeles by six percent in 2015, and he also predicted a new robust wave of job creation as helping to fuel homebuying.
Smoke forecast that a booming job market and affordable housing will help the Millennial population in Minneapolis advance that city into the realm of a hot housing market for 2015, while a spike in new construction and an anticipated household growth of seven percent in the next five years will make Phoenix attractive to homebuyers. The second California city on the list, San Jose, will benefit from its location in the heart of Silicon Valley, although Smoke admitted that affordability will remain a huge challenge despite strong income growth.
Rounding out the top 10 is Washington, D.C., where Smoke believed a home sales rebound of 10 percent is possible in the next 12 months—a much-needed turnaround following this year’s two percent decline.