I receive a lot of questions about the local real estate market, as well as the bigger picture. Yes, real estate markets in different areas will always have their ups and downs, but there are a few markets who have steadily been good or bad over the last three years.
San Francisco is on both the best and the worst list. CBS said, “ San Francisco as having the highest risk for being in a real estate bubble of any American city. Home values there have jumped 66 percent in the last five years, compared with a 22 percent gain across the U.S., according to Zillow data.”
Los Angeles, however, is only on the top of the best list because of its job market. The median home value in Los Angeles stands at $590,400 and is projected to rise 1.7 percent in the next year, according to Zillow. Employment in Los Angeles is forecast to grow by 1.9 percent in the next year, slightly head of the national average of 1.5 percent.
New Jersey is also a “worst” when it comes to buying a home. The yearly property taxes for a home priced at the $276,000 median would be $6,569, or $547 a month. Virginia isn’t great either. Virginia residents face the fourth-highest mortgage rates in the country, according to mortgage rate averages from Rate-Watch. Compared to the median mortgage rate of 4.07%, Virginia’s rates add $5,000 to the total cost of a 30-year mortgage for each $100,000 borrowed. Montana is also not a great place to purchase a home.This state’s higher home prices are out of reach for many of the state’s residents, since the median income is only $51,102. It’s actually cheaper to rent a home in Montana.
Buying a home can be tricky if you are in any of the markets I mentioned. Good markets bring out bidding wars. Bad markets introduce affordability issues. The best thing to do is buy a home for you that meets your needs and is affordable to you after you have reached job stability.