From our friends at John Burns Real Estate Consulting – HT to Stormin! Although John included San Diego as one of the towns that could be impacted by FHA loan limits being reduced, we’re probably more of a booming-market hybrid. Our drivers include Qualcomm and biotech, foreign investment, and low inventory.
Read the full article here:
A brief excerpt:
I find three primary reasons that certain housing markets are booming:
|Tech boom. Prices are rising rapidly in the best locations in the Bay Area and Seattle. I believe the best Bay Area locations, which extend all the way to the East Bay, are now officially overpriced because the wave of tech millionaires will not continue forever. Our Northern California leader Dean Wehrli recently calculated that one city in the Bay Area is usually 20% more expensive than a more outlying city is now 50% more expensive!|
|Pro-growth environment and oil boom. Texas’s pro-growth attitude, which is best exemplified by their governor who has been flying all over the country to recruit companies to Texas, has succeeded in adding 700 new jobs per day for the last two years, and those new employees are buying homes, particularly in Houston. Our Dallas consulting leader Paige Shipp notes that the oil industry boom helps, but health care, financial services, transportation, and other sectors have also contributed to the growth.|
|45+ buyer markets. The oldest Baby Boomer turns 68 this year, and the youngest turns 50. They are buying homes in droves as their employment situation, home values, and stock portfolios have almost fully recovered from the Great Recession. Our Florida leader Lesley Deutch was recently in Naples, where prices are rising rapidly thanks to strong sales. We are seeing strong sales in this same demographic throughout the country, however.|