Is Detroit really the hottest housing market in the U.S.? While many housing indexes are reporting the city as the nation’s hottest market, one analytics firm disagrees.
In recent week, Detroit has often topped “hot housing market” lists on the strength of its 28% year-over-year price gains. The problem, according to Pro Tek Valuation Services’ Home Value Forecast, is that price gains alone aren’t the best way to measure a housing market’s strength.
“Home Value Forecast believes that one needs to look at multiple criteria to gain a full view of the market,” Pro Tek wrote in a release.
Looking only at percent change in sale price, these would be the hottest markets in the U.S. right now:
- Detroit-Dearborn-Livonia, Mich.
- Palm Bay-Melbourne-Titusville, Fla.
- Port St. Lucie, Fla.
- Merced, Calif.
- San Francisco-Redwood City-South San Francisco, Calif.
“While Detroit has seen healthy gains this year, we don’t believe anyone would pick the city as being the hottest market in America,” the release stated.
To illustrate, the Home Value Forecast compared Detroit home prices to those in San Francisco. While it’s true that Detroit has seen a greater percentage gain recently, the city is still struggling to recover from the housing collapse, and prices have yet to return to pre-crash levels. In San Francisco, meanwhile, prices are at an all-time high.
“In Home Value Forecast’s rating system Detroit’s market is considered ‘soft’ while San Francisco is ‘strong,’ the release stated.
The Home Value Forecast uses a number of real estate market indicators to determine the strongest housing markets, rather than simply replying on percentage gains. Using those metrics, the top U.S. markets right now would be:
- Bellingham, Wash.
- Cheyenne, Wyo.
- Mount Vernon-Ancortes, Wash.
- Sacramento-Rosedale-Arden-Arcade, Calif.
- San Antonio-New Braunfels, Texas
A number of housing indexes have named Detroit as the hottest housing market in the U.S. right now. And if you’re going just by percentage of price growth, that’s true. But is it really the whole story?