17 American cities where home prices are skyrocketing — but houses are still affordable

17 American cities where home prices are skyrocketing — but houses are still affordable

February 10, 2017

caption: Sellers rejoice.
source: Justin Sullivan/Getty Images

Homebuyer demand is surging in many markets across the US, sending home prices skyward.

Even though the number of home sales are slightly down this summer, the national median home price rose 6.5% year-over-year to an all-time high of $263,800 in June, according to the National Association of Realtors (NAR).

“The demand for buying a home is as strong as it has been since before the Great Recession,” said NAR chief economist Lawrence Yun.

“Listings in the affordable price range continue to be scooped up rapidly,” he said, “but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

In a new report, GOBankingRates examined home prices for the 100 most populous markets using Zillow data, comparing prices in each market for June 2016 and June 2017.

Overall, 19 cities saw a median home price increase of more than 14% in the last year, and an average increase of nearly 30% over the last two years. With this data, we checked out whether these markets are still affordable for homebuyers in spite of surging prices.

To calculate affordability, we applied the standard measure of housing affordability – 30% or less of pre-tax income – to the median home price. We used Sperling’s Best Places data for median household income for each city and assumed a 20% down payment and 4% fixed rate 30-year mortgage.

With the notable exceptions of New York City and Seattle, 17 of these cities remain affordable markets. That’s a win-win for buyers and sellers.

Read on for the full list, which is dominated by markets in the South and the Midwest.

17. Garland, Texas

source: Courtesy of Mary Beth Harrison, Keller Williams – Park Cities

Median list price (June 2017):$203,950

Year-over-year increase:14.58%

16. Kansas City, Missouri

source: Courtesy of Toni Pence, Realty Executives of KC

Median list price (June 2017):$195,000

Year-over-year increase:14.77%

15. Las Vegas, Nevada

source: Courtesy of Pete Torsiello, Signature Real Estate Group

Median list price (June 2017):$269,900

Year-over-year increase:14.90%

14. Lexington, Kentucky

source: Courtesy of Adam Gullett, CENTURY 21 Advantage Realty, A Robinson Company

Median list price (June 2017):$246,163

Year-over-year increase:15.57%

13. Orlando, Florida

source: Courtesy of Amy Kingham, Keller Williams Winter Park

Median list price (June 2017):$264,900

Year-over-year increase:15.68%

12. Omaha, Nebraska

source: Courtesy of Nancy Schizas, CBSHOME Real Estate 159 Dodge

Median list price (June 2017):$226,000

Year-over-year increase:15.90%

11. Lincoln, Nebraska

source: Courtesy of Roger Reynolds, Woods Bros Realty Country Club

Median list price (June 2017):$219,900

Year-over-year increase:16.35%

10. Cleveland, Ohio

source: Courtesy of Judy Makaryk-Rosen, RE/MAX Trinity

Median list price (June 2017):$69,900

Year-over-year increase:16.69%

9. North Las Vegas, Nevada

source: Courtesy of Anat Meged, Hecker Real Estate & Develop

Median list price (June 2017):$227,845

Year-over-year increase:16.84%

8. Indianapolis, Indiana

source: Courtesy of Garrett Brooks, CENTURY 21 Scheetz

Median list price (June 2017):$145,950

Year-over-year increase:16.85%

7. Fort Wayne, Indiana

source: Courtesy of Timothy McCulloch, Scheerer McCulloch Real Estate

Median list price (June 2017):$145,000

Year-over-year increase:17.03%

6. Minneapolis, Minnesota

source: Courtesy of Ryan Fischer, RE/MAX Results

Median list price (June 2017):$269,900

Year-over-year increase:17.35%

5. Knoxville, Tennessee

source: Courtesy of Christine Sparks, Realty Executives Associates

Median list price (June 2017):$198,900

Year-over-year increase:19.10%

4.. Cincinnati, Ohio

source: Courtesy of Kathyryn Bronkhorst, Keller Williams Advisors Realty

Median list price (June 2017):$180,000

Year-over-year increase:20.60%

3. Pensacola, Florida

source: Courtesy of Kim Gibbons, ERA Emerald Coast Realty

Median list price (June 2017):$188,650

Year-over-year increase:21.01%

2. Atlanta, Georgia

source: Courtesy of Bill Carter, BHHS Georgia Properties-Buckhead

Median list price (June 2017):$335,000

Year-over-year increase:24.54%

1. Buffalo, New York

source: Courtesy of Thomas Needham, MJ Peterson Real Estate

Median list price (June 2017):$84,900

Year-over-year increase:34.76%

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