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Trulia’s Housing in 2017 report predicts the top 10 markets to watch in the new year based on job growth, home affordability, and online search frequency for housing.
Five out of the top 10 cities listed are beach cities located in Florida. Jacksonville tops the list because of its high inbound-to-outbound home search ratio and strong job growth, according to Trulia. Taking the second spot is Cape Coral-Fort Myers, with an even higher job growth and a drop in vacancy rates over the past year. Like Cape-Coral-Fort Myers, Deltona-Daytona Beach-Ormond Beach shows strength in job growth and high inbound-to-outbound home search, but the area lacks in affordability, Trulia reported.
Ralph McLaughlin, Chief Economist at Trulia, says that the beach does not play an integral role in determining the popularity of these markets and says that these areas are being inhabited by the “baby boomer” generation.
“While we think that their proximity to the beach is a valuable asset to housing market growth in these areas, we did not explicitly factor it into our analysis but think it may be partly why job growth is strong,” he said. “Even those these markets aren’t the most affordable, households these days are willing to pay a premium to live in markets with high amenities, and beaches certainly can be classified as an amenity. We don’t exactly who is moving into these areas, but we do now job growth has been especially strong in the areas of construction, professional and business services, and leisure and hospitality, of which we think much is being driven by aging baby boomers and a business friendly tax environment.”
These areas will be ones to watch in 2017, and McLaughlin noted that there will be signs of growth in the housing market next year. “While we saw signs of a cool down in 2016, we think 2017 might be poised for renewed growth in the housing market. We think this is because of two primary reasons: President-elect Trump’s administration will likely emphasize demand-side policies that loosen mortgage credit and stimulate private sector growth, and we think there is much pent-up demand for home buying, but that it is being held back by a combination of low inventory a home buyer’s difficulty in saving for a down payment,” he said. “As the labor market tightens, rising wages should help with the latter, while new construction should help with the former.”
Trulia listed as the top 10 markets to watch in 2017: 1. Jacksonville, Florida; 2. Cape Coral – Fort Myers, Florida, 3. Deltona-Daytona Beach-Ormond Beach, Florida; 4. Grand Rapids, Michigan; 5. Tampa-St. Petersburg, Florida; 6. Colorado Springs, Colorado; 7. Charleston, South Carolina; 8. San Antonio, Texas;9. Phoenix, Arizona; and 10. North Port-Sarasota-Bradenton, Florida.