In hopes of encouraging more readers to move somewhere (anywhere!), I took a spin around the north-coastal region of California via Zillow. I don’t know anything else about the area other than it is remote – readers who know more can feel free to comment!
We’ll be in Tucson next month, and I’ll be doing my own investigation!
In 2021, single-family existing-home prices rose at the fastest pace in five decades at an average year-over-year pace of 18%, driven by strong job growth, historically low mortgage rates, a post-pandemic recovery in household formation, and inadequate housing construction and pandemic-induced supply bottlenecks. At the metro area level, the differences in price appreciation were heavily driven by job growth and by businesses and people moving into the area, especially among workers with the ability to work fully remotely.
Are there markets where home prices are still undervalued relative to the market fundamentals’ underlying home prices? In its latest report, 2022 Housing Market Hidden Gems, the National Association of REALTORS® identified the top 10 markets with strong underlying housing market fundamentals but where home prices are still undervalued and relatively affordable. As such, these hidden gem markets are expected to experience stronger price appreciation in 2022.
In alphabetical order, the hidden gem markets are as follows:
In San Diego County, the excessive frenzy conditions have been driven by newcomers who don’t have a house here yet, and who figure that they just have to pay what it takes to get one.
It is those buyers that out-bid the locals. As those numbers dwindle, the frenzy will subside:
News reports, anecdotes, and preliminary research have speculated about whether there has been an exodus from California during the COVID-19 pandemic. The implications of population changes, such as federal representation and federal funding allocations, are significant.
This policy brief uses the University of California Consumer Credit Panel (UC-CCP), a dataset containing residential locations for all Californians with credit history, to track domestic residential moves into and out of California at a quarterly frequency through the end of September 2021. This brief updates our spring 2021 analysis that used data through December 2020.
Real estate has been challenging for many buyers this year, with home prices up sharply and inventory at record low levels. Some buyers may get a break in 2022, but it’s not likely to be in some of the nation’s smaller cities that have seen strong housing demand due to remote work during the pandemic.
The cities that are likely to see the strongest price increases and home sales are described as second-tier cities that offer better affordability and more space compared with the nation’s largest cities, according to a new forecast from Realtor.com. It based its forecasts on recent home sales as well as economic trends, such as unemployment and household growth.
Boise, Idaho, is again likely to be near the forefront in 2022, Realtor.com predicted. That comes after local property prices surged more than 30% in the third quarter, and Boise was named the least affordable housing market in the U.S. — with the city’s median home price jumping to almost $535,000, or 10 times the city’s median income.
Boise is attracting people who want to relocate from expensive tech hubs like San Francisco, people for whom those prices may seem like a deal compared with pricing in bigger cities. And that trend is likely to continue in 2022, said Realtor.com chief economist Danielle Hale.
“2021 was an ultracompetitive year for the real estate market, especially for smaller secondary tech markets. They benefited from knowledge workers being freed up from going into the office every day,” Hale noted. Next year will be “in many ways a continuation of what we saw this year.”
She added, “People are embracing the flexibility of the workplace and moving into areas that are more affordable.”
Most of the top 10 markets for 2022 have a “small-town kind of quality of life, yet they still have thriving local economies,” Hale noted.
Average home prices in the top 10 real estate markets are expected to jump 7.4% next year, or more than twice the national pace of 2.9%, Realtor.com said. Buyers may get a break next year with more inventory entering the market, relieving some of the low-stock issues that hampered home purchasers in 2021, Hale noted.
Many big cities like New York and Los Angeles are forecast to see price appreciations but may not match some of the smaller cities, according to the forecast. Prices in the New York metropolitan region, for example, are predicted to rise 2.3% in 2022, while home prices in the Los Angeles are likely to rise 4.8%, Realtor.com said.
Below are the top 10 markets for 2022, based on estimates from Realtor.com. Forecasts include the change in number of homes sold as well as prices for 2022 versus 2021.
1. Salt Lake City, Utah
Predicted sales change: 15.2%
Predicted price change: 8.5%
2021 median home price: $564,062
2. Boise City, Idaho
Sales change: 12.9%
Price change: 7.9%
2021 median home price: $503,959
3. Spokane-Spokane Valley, Washington
Sales change: 12.8%
Price change: 7.7%
2021 median home price: $419,803
4. Indianapolis-Carmel-Anderson, Indiana
Sales change: 14.8%
Price change: 5.5%
2021 median home price: $272,401
5. Columbus, Ohio
Sales change: 13.7%
Price change: 6.3%
2021 median home price: $298,523
6. Providence-Warwick, Rhode Island-Massachusetts
Sales change: 8.1%
Price change: 9.5%
2021 median home price: $419,813
7. Greenville-Anderson-Mauldin, South Carolina
Sales change: 11.4%
Price change: 5.7%
2021 median home price: $305,078
8. Seattle-Tacoma-Bellevue, Washington
Sales change: 9.6%
Price change: 7.5%
2021 median home price: $666,754
9. Worcester, Mass.-Connecticut
Sales change: 8.4%
Price change: 8.2%
2021 median home price: $397,188
10. Tampa-St. Petersburg-Clearwater, Florida
Sales change: 9.6%
Price change: 6.8%
2021 median home price: $335,814
Article includes a 2:30-min video of Boise market conditions:
Do a thorough investigation on where you’re moving!
To Rick Brown and Jeanne Brown, finding a forever home has seemingly taken forever.
In just five years, the couple—he’s 71 and she’s 72—bought or built two different houses that they planned to live in for the rest of their lives. But their tastes changed—so they decided to pick up stakes both times. Now they have settled on a third home that seems to be their final choice.
If there is one takeaway, Mr. Brown says, never use the words “forever home.”
Like the Browns, many couples near or in retirement embark on a quest to find the perfect place to spend their twilight years. Soon, however, some people realize that what’s perfect now may be less than ideal later. Poor health and dwindling finances are obvious reasons some seniors choose to move. Other retirees retool their priorities when they realize how much they miss the grandchildren or hate their new neighborhood.
In truth, most home buyers don’t stay in their homes as long as they think they will, says Jessica Lautz, vice president of demographics and behavioral insights with the National Association of Realtors, a trade group. “People may not want to move,” she says, “but they may decide to because life happens.”
The Browns began their forever-home quest in 2011, when they sold a bed-and-breakfast in Annapolis, Md., that Mrs. Brown had operated since 1997. Cash flow had been good for a while, but in time, neighbors started listing their homes as vacation rentals, cutting into the B&B business. Then came the 2007-09 recession. When Mr. Brown retired from his full-time career in banking in 2010, the couple decided to close their business. They sold their B&B—purchased for $540,000 in 1996—for $925,000.
The Browns found their first forever home in Southport, N.C., near the Intracoastal Waterway. They paid about $200,000 for land and another $400,000 to build “the nicest place we have ever lived in,” Mr. Brown says. Still, the nearest big city was Wilmington, N.C., over a half-hour away. “We loved the area and our home there, but it was isolated,” Mr. Brown says. “We were accustomed to good restaurants and the theater, and the like.”
While living in Southport, the Browns traveled west to Asheville, N.C., for a tennis tournament. Driving around, they realized Asheville offered the best of both worlds—the trappings of city life and the outdoor activities in the beautiful Blue Ridge Mountains. So, they sold their Southport home for $480,000 in 2016.
“Where we got clobbered was the purchase price of the lot,” Mr. Brown says, which the couple had purchased right before the recession of 2007-09. “When we left, the value of the lot had fallen about 50%.”
The couple spent about $470,000 to build their second forever home, situated on the side of a mountain about 15 minutes from downtown Asheville. To stay busy, both Browns took part-time jobs, volunteered and pursued their hobbies. “But despite being a nice area, we had a tough time breaking into the social arena,” Mr. Brown says. “I didn’t click with the different types of groups. I thought, ‘Maybe this isn’t the place for us.’ ”
That realization led to their third—and current—forever home. In 2019, the Browns sold their house in Asheville for about $570,000 and moved to the Villages, a sprawling 55-and-older community in central Florida. There, they bought a modest three-bedroom home for $408,000. Mr. Brown plays golf, softball and pickleball; Mrs. Brown golfs, belongs to a book club and teaches pottery classes. Together they foster puppies.
Mr. Brown says he and his wife have no regrets—their experiences in Maryland and North Carolina helped them realize why Florida is such a good fit. To them, an enjoyable retirement is more about the lifestyle and less about the house. “Right now, we’re saying we’re going to stay put.”
Here is the map for most of Riverside County – Temecula is a good option for movers because it’s close to SD County and a place where you can buy a newer home for less and still keep your SD job and doctors:
How about moving to the High Desert? It’s close enough to San Diego that you could re-visit when necessary, and once we get self-driving cars, you could commute! Here’s a link to the 67 homes for sale in Joshua Tree today:
Here’s a link to homes for sale under $620,000 in Yucca Valley, which is 27 miles north of Palm Springs and has a population of 22,000+ people at 3,369ft elevation:
THE GREAT CALIFORNIA MIGRATION
Trading big city for high desert
YUCCA VALLEY, Calif. — Tyler Gaul strode across the sprawling backyard of his Yucca Valley home and surveyed the rocky hillside a few steps away from the pool and basketball court that sit atop his 2-acre property.
When he first moved to the desert from Los Angeles last fall, this jagged landscape granted him a sense of serenity as the crowded city he left behind grappled with a pandemic.
Gaul, who runs his own skin care company, knew it was time to move when he could no longer exercise outside his Echo Park apartment — his respite from stay-at-home orders — because of wildfire smoke polluting the air. Constant and worsening wildfires, paired with a public health crisis, proved to be too much.
“I have a lung condition, and I was like, ‘No, I can’t do this anymore,’ ” he recalled.
So he set out for the desert.
Like many other city dwellers who have fled urban sprawl over the last year and a half, Gaul sought shelter in a more isolated desert community in hopes of finding more space and clean air, and limiting his exposure to the coronavirus. Local real estate agents say that the migration is driven by a desire for affordable housing and large plots of land, a move further propelled by the nation’s sudden shift toward teleworking.
Until last year, Gaul hadn’t seen himself as the desert type or thought of making an escape from the city. But since moving, he and his girlfriend have hosted pool parties for their friends living in the city; they’ve learned how to tackle home repairs, like the time there was an irrigation leak; they stood in stillness during their first desert winter and listened as the sound of snow falling off trees pelted the craggy ground below.
“One day, we were in the pool and there was this huge owl, and it just like swept down and looked like a huge, silent airplane. It was just, like, so majestic,” Gaul, 35, said as he lifted a plastic cover to check for a tarantula that had recently been roaming the side of his home.
The high desert communities of Yucca Valley, Pioneertown and Joshua Tree about 130 miles east of Los Angeles have been inundated not only with new home buyers but also renters and city folk who come to work remotely at one of the many Airbnbs that have cropped up in recent years — sometimes to the chagrin of locals who could live without hearing the loud parties, or driving through the dust kicked up by Teslas plowing through dirt roads in a rush that those used to a slower pace of life have trouble understanding.
“It feels like the zeitgeist of the desert,” said Tom Murtagh, a Realtor in Twentynine Palms. “It’s a time of change. A lot of people here are having a tough time with it and I am very sympathetic. It’s a tough situation — gentrification reached the desert and it’s good and bad. There’s money to fix things, but it’s a double-edged sword.”
Although the pandemic accelerated migration to the high desert, the shift was gaining steam in the years before.
Jean Michel Alperin moved to Yucca Valley with his family in 2018. He and his wife, Sarah Scott Alperin, were disappointed with the lack of options in their price range in L.A. despite looking at homes in neighborhoods across the city. Jean Michel was on the brink of helping to revitalize and reopen Pioneertown’s Red Dog Saloon and had pondered making the commute to the desert a few days a week for work.
“While I was doing business here for a couple days I decided to see Realtors. We saw four places, and the fourth was the home that we bought. It was one of those dream homes. It seduced me in this very intimate way. Kind of like when you meet somebody, it was a romance,” Alperin, 40, said. “It was a total about-face. And it was tough, for sure. There’s a lot of differences moving from Echo Park to Yucca.”
Alperin said that he doesn’t necessarily miss the people he could meet in L.A. — he’s bonded with other transplants from Echo Park here in the desert — but he does miss the wealth of cafes filled with people poring over books.
“That’s kind of the feeling, that there’s just one place. You don’t have options,” he said. “But that’s part of coming out here. We’re all kind of frontier people.”
It’s hard to believe that we got smoked by Cleveland, Chicago, and Detroit (and Ventura didn’t make the list!), but our housing cost is a barrier. They have many reviews of each city, and for those who take politics into the decision-making process, these links include the voting history in last five presidential elections (including 2020):
America’s Best Cities* for a Healthy (and More Affordable) Retirement
*Includes surrounding metropolitan areas, as defined by the United States Census Bureau, including one or more central cities and the surrounding county or counties (which comprise the suburbs).
One factor that will slow down the exodus is the increased difficulty of moving out of state – it’s not easy, or cheap, to buy a home outside of California any more. But fewer people leaving will mean less inventory – and could ramp up the frenzy in 2022.
The researchers used open-source data from Zillow or other providers to score the top 100 overvalued or undervalued metro areas in the nation, ranking the cities by a percent premium homebuyers are paying in today’s market based on a history of past pricing.
Here’s how the top 10 rankings landed, according to the research:
Boise, Idaho, where homes are selling at an 80.6% premium.
Austin, Texas, at a 50.7% premium.
Ogden, at a 49.7% premium.
Provo, at a 46.2% premium.
Detroit, at a 45.6% premium.
Spokane, Washington, at a 45.2% premium.
Salt Lake City, Utah, at a 42.4% premium.
Phoenix at a 42.3% premium.
Las Vegas at a 41.9% premium.
Stockton, California, at a 38.5% premium.
The typical value of homes in Boise was over $523,300 as of the end of August, up more than 46% over the past year, according to Zillow.
Our local home prices have been rapidly escalating over the last year. First, we ran out of NSDCC houses for sale under $1,000,000, and today there are only 6 for sale priced under $1,100,000!
What are the alternatives for those buyers who want to spend less?
Buy a house further out.
Buy a condo/townhouse.
Get bigger gift from parents or grandparents.
Keep playing the lottery!
Here’s an example of going just a tad further out. This house is located on the border of Carlsbad, and while it did have ten offers and got bid up $80,000 over list, it closed for $830,000:
