Another Top-10 List — Five Each Best and Worst Cities for Home Price Appreciation by 2018

Since 1997, I personally have significantly benefitted from increased home prices while living in Houston. My original purchase of a 1950 asbestos-sided bungalow with no grounded outlets became a great investment, plus a very desirable neighborhood to reside, until selling several years ago. And the home-price gain was tax free.

Given the need for tax revenues by the Federal government, the tax-free gains on the sale of the personal residence may not be the case in the future. I expect a trimming of the tax-free gains on home value increases in the coming years as the U.S. government finds out they have to increase tax revenues just to maintain mandatory spending (read that as entitlements and interest payments on the debt). Taxes are going up.

The home, for most people, still remains their largest component and store of wealth. Many households have recovered from the downturn of the housing bubble, but some still remain behind — as far as values go. But things are looking up. For most.

Given expected population growth and current limited construction, home price appreciation in the next few years will be significant in some markets, but not in all. Some will continue to struggle. Some will boom. You want to live where it booms, economically speaking.

The Demand Institute http://www.demandinstitute.org/ , (the Conference Board and Nielsen) is a forecaster of where demand for housing is heading. They lay out their expectations for housing in the top 50 markets in the country.

So where does the Demand Institute Forecast the best five markets of the top 50 (and the bottom five) by 2018 based on home price appreciation? Restated, where are home values expected to increase the most? And least?

The following table lists the Demand Institute’s expectations for the top and bottom five out of 50 markets.

3-19-14 graph

Part of the Demand Institute’s considerations are based on how much a respective market has already recovered.

To read the almost 100 page report click http://demandinstitute.org/2000cities/report/.

So what is my best bet where home prices are going up the most? The top performing price-change markets will be those with the best job growth rate.

Trust me.

Jobs are everything.

Interesting report with some unique perspectives. Hope you read it.

Ted

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