States where home prices increased the most and least in 2019
Homebuyers in 2019 faced a tough housing market again, while current owners enjoyed another increase in home equity.
A lack of homes for sale, a crowd of potential buyers, and low mortgage rates helped to boost housing prices higher in 2019, the seventh straight year that prices have increased.
Median home prices hovered around $250,000 in October, up more than $11,000, or 5%, versus last year, according to the latest data available from home search platform Homesnap.
But not all markets increased in sync. These are the states that saw the biggest and smallest year-over-year changes in their median home prices based on Homesnap data. Percentages were rounded to the nearest tenth.
Where home values increased the most
Massachusetts homeowners saw the values of their properties increase by 33% in 2019 – the most of any state – from $391,000 to $520,000.
“I think the primary reason is the lack of inventory on a year-over-year basis,” said Rich Rosa, co-founder of real estate firm, Buyers Brokers Only. “It’s been going down for eight years consistently.”
He noted that the number of condominiums on the market in October was the lowest since 2004. Inventory for single-family homes in the state have fallen 92 out of the last 93 months as well.
Median housing values in Michigan, home to the automotive industry, increased 13.5% from $156,000 in 2018 to $177,000 this year.
This year’s increase was long overdue, experts said, because Michigan was was slow to rebound from the recession. New construction didn’t begin in the state until late 2016, said Jiss Foss, a real estate agent with RE/MAX Edge.
“There was real pent-up [demand from a] group of people that didn’t purchase when they normally would have [after] 2009,” Foss said. “I think there was a larger than normal group of those in [their] late 20s and early 30s looking in recent years.”
Median housing values in Illinois saw an uptick from $156,000 in 2018 to $177,000 this year, an increase of 9.05%.
Much of the appreciation is due to the influx of tech companies in recent years, especially in cities like Chicago, local real estate experts said. As more jobs became available, the demand for housing increased.
“Google coming to the Fulton market area encouraged other companies to do the same, such as McDonalds and its subsidiaries,” said Wilfredo Aguilar, a broker at real estate firm, Compass. “Then single-family properties and new condominiums started opening around the perimeter.”
The Lonestar State saw housing prices increase from $176,000 to $190,000, growing 7.95% from last year.
With cities such as Austin and Dallas driving prices higher, Texas may no longer be the attractive spot for homebuyers it once was, experts said.
“I think Texas has had its run for quite a while. We’ve been selling for 15 years,” said Jason Hartman, founder of Platinum Properties Investor Network, a real estate investment firm.
The state of Georgia saw its median home values increase from $175,000 to $188,000, gaining 7.43% from 2018. The increase was largely fueled by early interest from investors and a sprout of technology startups.
But, perhaps, not next year.
“Places like Atlanta are almost getting too expensive for investors,” Hartman said.
Nebraska, the home of legendary value investor Warren Buffet, saw a 6.67% increase in median prices from $180,000 to $192,000.
Utah median home values increased from $299,000 to $318,000, gaining 6.35% year over year. The appreciation is led by Salt Lake City’s highly educated workforce with a thriving tech sector, Hartman said.
Home values in Iowa saw an increase from $134,000 to $142,000, growing 5.97% from last year, helped by the state’s lower cost of living, said David White, director of content marketing at connective3, a digital marketing agency.
“People are looking for more bang for the buck,” said White, who represents investment firm Blacktower. Recently, Blacktower named Iowa its number one U.S. state to retire.
Homes in South Carolina increased in value from $169,000 to $179,000, rising 5.92% from 2018 and making the No. 9 spot.
“People are leaving states such as New York to go where there are more job opportunities, and those include North and South Carolina,” said Jarred Kessler, founder of real estate company Easy Knock.
Rounding out the top 10 is Ohio, where the median home price grew from $137,000 to $145,000, increasing 5.84% year over year.
“I think everyone knows that we were hit pretty hard by the foreclosures and now we’re coming out of it,” said David Sharkely, a real estate agent at Progressive Urban Real Estate. “People are willing to pay more for a home that’s been fixed up with decorated paintings and good flooring.”
Where home changed little, not at all, or decreased
Not all states enjoyed rapid housing appreciation. In fact, two states saw no change year over year in their median home prices.
Home values in Connecticut stayed steady at $267,000 this year, not increasing at all from 2018. This is largely due to once-growing industries like financial services that are now contracting, Kessler said.
Alabama housing prices also remained stagnant at $288,000, with no change from last year.
“Alabama doesn’t have a lot of job creation and hasn’t established itself as a tech hub,” Kessler said. “People are moving where jobs are increasing, such as Nashville.”
Home values in Mississippi also didn’t grow generously this year, inching up 0.7% to $156,000 from $155,000 in 2018.
“There hasn’t been a new industrial creation in Mississippi,” said Kessler. “The biggest industry is energy, oil, and gas, but I don’t know of any newer industries.”
District of Columbia
Washington, D.C., saw its home prices tick upward by 1.7% over the past year. Median home values increased $4,000 from $235,000 to $239,000 in 2018.
“In D.C., it depends on the election cycle,” Hartman said. “Those things can get skewed. It’s a little complicated.”
A similar trend happened to home prices in neighboring Virginia, which also saw values increase 1.7% from $234,000 to $238,000.
Louisiana’s home prices increased quicker than its Deep South neighbors, but the market still was well behind the national average. Prices in the state edged 1.9% higher from $156,000 in 2018 to $159,000 this year.
“Louisiana is evolving a bit quicker than Mississippi and Alabama due to New Orleans,” Kessler said. “People are starting to modernize the city and put in new construction.”
While housing prices in Montana rose a modest 2% year over year, from $246,000 to $251,000, Kessler predicts a potential housing boom there over the next five years because of the state’s tax advantages.
Home values in Hawaii increased just 2%, but the state’s median price is among the country’s highest, going from $483,000 to $493,000 this year.
Similarly, Maine also saw a minor jump from $416,000 to $426,000, up 2.4% year over year. The state’s unfavorable tax laws make it unattractive to new homeowners.
“Hawaii and Maine are states with the highest tax burdens,” said Brian Davis, co-founder of Sparkrental.com.
Nevada – home to bustling Las Vegas – saw home values increase 2.4% from $205,000 to $210,000 in 2019.
Nevada had benefited from the migration of residents moving away from California because of the high cost of living. Currently median home values in California hover around $586,000, according to Homesnap more than double that of Nevada’s.
“Las Vegas had a huge crash it took awhile for about 3-4 years to start turning,” said Hartman.
Dhara is a writer for Yahoo Finance. Follow her on Twitter @dsinghx.
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