It’s no surprise that home prices in the U.S. are still rising. You hear about it almost every time you turn on the news. A shortage of supply combined with strong demand have accelerated the housing market and boosted home prices to record highs.
But at the local level, the rate of growth has been uneven. Some real estate markets across the country have experienced modest price growth over the past year, while others have skyrocketed.
Austin, Boise, Salt Lake City and San Diego are just a few of the housing markets where home prices are rising at a ridiculously fast pace.
Five Housing Markets With Rapidly Rising Home Prices
According to recent reports, house values in cities like Austin, Boise, Salt Lake City, San Bernardino and San Diego are currently rising much faster than the national average. These real estate markets have gotten a lot more expensive over the past year, a trend that will likely continue well into 2022.
Note: The percentage listed beside each city below shows how much the median home price rose over the past year, based on data provided by Zillow.
Austin, Texas: +35.7%
Austin, Texas has seen a major influx of new residents from other parts of the state and the nation. They come for the jobs, the culture, the natural beauty — and for what used to be a relatively affordable housing market.
Lately, however, the Austin area real estate market has gotten a lot more expensive.
According to the real estate data company Zillow, the median home price in Austin, Texas rose by around 35.7% over the past 12 months. The broader metro area (which includes cities like Cedar Park and Round Rock) posted an even bigger annual increase at 36.8%. The median home price within the city of Austin climbed above $500,000 earlier this year and shows no sign of stopping.
This meteoric rise in house values has some concerned that the Austin real estate market might experience a major downturn or “crash” in 2022. But as we wrote in a recent report, that appears unlikely based on the current supply and demand situation.
According to Susan Horton, president of the Austin Board of Realtors:
“Our market has established its own new normal, as median prices climb while inventory remains low. With the unprecedented growth our region continues to experience, we can expect these trends to continue.”
The short version is that there are lots of buyers seeking homes in the Austin metro area, but very few properties to go around. As a result, this housing market will likely experience rising prices for the foreseeable future.
Boise, Idaho: +41.1%
The real estate market in Boise, Idaho tops our list, in terms of year-over-year home price growth. According to data provided by Zillow, the median house value in Boise rose by a staggering 41.1% over the past year or so. The median was approaching $500,000 when this story was published, and will probably surpass that threshold before summer’s end.
Like the other housing markets on this list, the Boise metro area is currently experiencing a severe shortage of supply. In fact, this happens to be one of the tightest real estate markets in the country when measured by available inventory.
As of June 2021, the Boise area housing market had about a 0.5-month supply of homes for sale. It doesn’t get much lower than that. Meanwhile, the metro area’s population continues to grow due to an influx of new residents.
As a result of this lopsided supply and demand situation, homes are selling very fast within the Boise real estate market. Over the past few months, most houses listed for sale were off the market within two weeks. That’s understandable, when you consider the chronic inventory shortage mentioned earlier.
Based on current conditions, it seems likely that home prices within the Boise real estate market will continue to climb for the foreseeable future.
Salt Lake City, Utah: +21%
Like Boise, Salt Lake City is another western state that has seen significant population growth over the past few years. This has brought more home buyers into the Salt Lake City real estate scene, boosting competition and prices alike.
In July 2021, Zillow reported that the median home value within the Salt Lake City housing market rose by 21% over the previous 12 months. The median price was around $527,000 as of June 2021, and climbing.
Here again, tight supply conditions have a lot to do with this growth. The Salt Lake City real estate market is currently experiencing a shortage of inventory relative to buyer demand. The metro area had about a one-month supply of homes for sale as of June 2021 — well below the national average. So it’s still a seller’s market in the Salt Lake City area.
San Bernardino and Riverside, California: +22%
We’ve lumped these California cities together because they form what is known as the “Inland Empire.”
This region of Southern California has also seen a major influx of residents in recent years. Many of the people moving into the San Bernardino and Riverside area have fled the more expensive coastal real estate markets, such as Los Angeles and San Diego.
As a result of this trend, inventory has plummeted while home prices have risen substantially. The housing markets of San Bernardino and Riverside have both posted strong double-digit price gains over the past year. According to Zillow, the median house value in both of these real estate markets rose by around 22% in the past 12 months.
Compared to the other cities on this list, Riverside and San Bernardino have a bit more supply available to buyers. Conditions aren’t as tight here as they are in places like Austin and Boise. But overall, there still aren’t enough homes available to meet the demand from buyers, and that’s putting upward pressure on prices.
San Diego, California: +23.3%
The San Diego real estate market has always benefited from strong buyer demand. From the beaches to the weather to the theme parks, this Southern California region has a lot to offer residents.
As a result, home prices within the San Diego real estate market tend to rise steadily over time — even at times when they’re cooling in other parts of the country.
Local real estate agent Cindy Waasdorp recently told The San Diego Union Tribune:
“As soon as anything comes on the market, right way within 48 hours, you start getting offers, usually multiple offers that go into overbid. I don’t see it slowing down until we get inventory. There is just such high demand.”
All of that demand is boosting prices. According to Zillow, the median home value within the San Diego-Carlsbad metropolitan area rose by 23.3% over the past year. The median price point for this housing market was around $775,000 when last measured.
Granted, these aren’t the only real estate markets in the U.S. with steadily rising home values. But they are some of the fastest-rising cities and metros, in terms of price growth. In all five of these housing markets, homes have gotten a lot more expensive over the past year. So buyer beware.