Seattle is the fastest growing major metropolitan housing market in the United States with growth up 1.9% quarter on quarter and 12.4% year on year, the latest data shows, indicating a strong housing growth in the United States.
Also recording strong growth was Portland with quarterly price growth of 1.5%, while annual growth is also outpacing the national average at 11.5% over the 12 months to May 2017.
The data from real estate firm Clear Capital also shows that quarterly home price growth is hovering at the 1% mark, while annual price change also remains steady at 6.3% with no change since April.
Regionally, the West continues to lead the rest of the country with quarterly home price growth at 1.2%, and annual growth of 8%. Quarterly growth in other regions is still healthy for this time of year as the South, Midwest, and Northeast continue to outperform May 2016.
Jacksonville recorded the highest quarterly growth at 1.9% and the report suggests that fewer distressed properties on the market are a key contributing factor with numbers down from 26.2% to 15.8% compared with a year ago.
Dallas is no longer one of the top performing housing markets and joins the 15 slowest growing housing markets in the nation. It was the nation’s top performing market just five months ago with home prices increasing at a rate of 1.5% per quarter, but current quarterly growth rates are almost half that at 0.8%. However, price growth is still up 9.1% year on year.
Meanwhile, separate research from property firm Zillow suggests that as rents become more expensive tenants are starting to look for cheaper housing options outside central areas and the result is rents rising faster in the suburbs.
Indeed, for the first time in four years, suburban rents are rising faster than urban rents while overall an increase in multifamily construction has slowed rent growth across the country, with rents rising at their slowest pace in five years.
The Zillow report says that the suburbs often offer larger apartments and more single family homes for rent with more space with about 19% of all single-family homes in the country are rentals, up from 13% in 2005.
The data shows that the median monthly cost of a suburban rental is up about 2.5% year on year while the median cost of an urban rental is up 2.3%. At this time last year, the median urban rental price was up 5% year on year and suburban rental prices were up 3%.
The trend is more pronounced in booming housing markets where rent affordability is worsening. Rents in the Nashville, San Francisco and Seattle metro areas are growing faster in the suburbs than in urban areas as rising costs force renters out of the city, increasing demand in the suburbs.
Over the past decade, the share of income needed for the median rent payment in the San Francisco metro has increased from 34% to 44% while in the Seattle metro the share has increased from 26% to 32%.
‘Because walkable urban centre close to amenities are typically a big draw for renters, you’d expect rents to rise faster in the city than in the suburbs which is exactly what we’ve been seeing until very recently,’ said Zillow chief economist Svenja Gudell.
‘But a handful of factors are helping turn the tables and beginning to push suburban rents up at a higher clip. These include deteriorating rental affordability in expensive urban cores; new apartments, albeit high-end ones, opening downtown compared to relatively few in outlying areas and preferences among some renters toward the space offered by single-family homes in the suburbs,’ she explained.
‘Rents themselves are still lower in the suburbs, but if demand keeps growing for suburban rentals and supply continues to lag, that will also start to change. As more formerly urban renters move to the suburbs in coming years, we’ll likely start seeing more apartment buildings and walkable amenities popping up in those communities,’ she added.
Source: Property Wire