Residents of huge metropolises like New York and San Francisco have a hard time. The city suffers from abnormally high rents and expensive mortgages. These things, however, can change in 2017. According to Zillow, a company specializing in real estate services, three of five biggest American cities may witness a lower than average growth in 2017. It is expected that values of homes will increase by three percent in 2017. Only two cities are anticipated to post higher than average gains. The two cities are Houston at 3.3 percent and New York at 3.6 percent. The second biggest city in the United States, Los Angeles, will witness home prices to rise by 1.5 percent. Chicago, at third place, will see an appreciation of 2.9 percent. Philadelphia, the fifth biggest city in the US will see its home prices rise by 2.8 percent. Houston and New York, are the fourth biggest and the biggest in the United States when it comes to population.
Cities set for better appreciation
To make sure that a metro area is not heading for a crash in the housing market, it is important to look at the percentage of homes whose prices are rising in that specific region. The value of a property can be regarded as increasing if the annualized appreciation rate goes above 1.5 percent.
Zillow recommends that the maximum price appreciation of all real estate markets will come from cities located far off from the coast. These cities are at present middle sized metropolitan areas. This is important as although home prices in the United States have come back to the level where they were before the housing crisis, there was no uniform rebound. An appreciation of 10 percent has occurred in homes valued below $100,000 from 2000. In contrast, values have doubled for homes priced between $500,000 – $1 million.
Some parts better
The south and west parts of the United States have benefited the most from the property appreciation. It follows that the cities in those parts of the US will enjoy a better than the average rate when it comes to housing gains. The gains from such a phenomena will be a boon of most middle tier metropolises. As per Zillow, it said that it has based all forecasts on a mix of swiftly rising home values, robust income growth and low unemployment rates. According to Dr. Svenja Gudell, the Chief Economist of Zillow, research by the company has unearthed that employment opportunities are more in the smaller markets located away from coastal areas.