We are NOT in the business of predictions when it comes to the housing and mortgage industry. Yet we certainly see some of the trends from the almost 2-years of COVID pandemic continuing in 2022: rising home prices, low inventory, low(ish) interest rates, and a clear urban exodus.
The last trend, a marked migration pattern from the urban centers to the outskirts, is one that is making some once sleepy mid-size or smaller cities come out of the shadow of those big urban areas as not only alternatives but also desirable places to live.
The biggest reasons for people leaving larger cities are 1) rising home prices, 2) increasing cost of living, and 3) more prevalent and accepted remote work options. Many companies have updated their remote work policies to either a fully remote or a hybrid working arrangement, allowing many of their employees do their work from anywhere.
This trend is gaining so much strength that some cities where people previously migrated to attracted by lower costs of housing and general living expenses — such as Austin, Denver, or Phoenix — are already becoming unaffordable. So, home buyers are looking even farther out and considering entirely new cities.
The following 9 Western cities are experiencing rapid rates of growth and are positioned to becoming boomtowns in 2022:
Reno median home sales price just hit $600,000 for the first time in record-breaking climb.
According to the Reno Gazette Journal, the median sales price of an existing single-family home in Reno reached the $600,000 mark in January — the first time it hit the key threshold.
The data from the Reno/Sparks Association of Realtors shows that, prior to reaching the new high of $600,000, the median sales price in Reno has been hovering around $550,000 since May. The previous record was $567,000, which was set in November of 2021.
Houses seem to be selling faster than ever before, fueled by an increase in household income across Northern Nevada as well as an influx of California families settling in the area.
There are several reasons for the rapid home value increase and population growth.
“Reno is the best of all worlds,” says top Reno-Tahoe area Real Estate Agent Carmel Allego-Fithian, “You are in no-state-tax and small-business friendly Nevada, only 20-30 minutes to Lake Tahoe and the California border.” She continues, “We are seeing a huge influx of transplants making our housing market hot yet still affordable in comparison to many cities that are close to mountains, skiing, and lakes.”
Reno/Sparks area is also going through a defining moment as its economy diversifies from the casino industry onto technology, distribution, and call-centers. Major brands such as Tesla, Panasonic, and Nanotech Energy have either moved or expanded their presence in the area in the last few years. Fintech, energy, and bio-technology are emerging as the next big industries positioned to grow fast in Northern Nevada.
“Reno is experiencing a renaissance and economic overhaul”, says Allego-Fithian, “… and is no longer just a gambling destination. It is now becoming a tech and manufacturing hub. Reno has so much to offer and is fast becoming a natural extension of the Lake Tahoe tourist hub.”
The California’s state capital has long existed under the shade of world-renown San Francisco, star-studded Los Angeles, and sunny San Diego.
As real estate continues to become unaffordable in nearby San Francisco, the city is starting to gain traction.
The capitol corridor train going multiple times daily to and from Silicon Valley as well as the tech industry making it flexible to work from home during COVID has made the Sacramento area more palatable to first time home buyers.
Maricopa county’s West Valley boom puts Surprise, AZ on U-Haul list of fastest-growing cities.
U-Haul says it analyzed one-way truck moves throughout 2021 and found that the number of people coming to the city rose nearly 10% year over year. U-Haul ranked Surprise No. 18 on its list of top-growing cities in America.
“Surprise is one of the fastest growing communities in the Phoenix area,” said U-Haul spokesperson Jesse Ashdown said. “People are tired of cold weather and want to live somewhere the sun is always shining.”
For the last 25 years, Palmdale has been rated as one of the top 25 fastest growing U.S. cities. Affordable housing developments in the 1980s and 1990s caused dramatic spikes in the population. Its proximity to the LA area combined with low cost of living makes it an ideal place to escape the city’s traffic and maddening pace.
The whole area is growing fast: nearby Victorville, Lancaster, and Santa Clarita all rank in the top 20 fastest growing CA cities from 2010-2022, according to data from the U.S. Census Bureau.
Located 45 minutes from Denver/Denver International Airport, 35 from Estes Park/Rocky Mountain National Park, 15 from Fort Collins, and 40 from Boulder, Loveland CO is a gateway to many fun places in the larger Denver metro area.
According to Brandon Wells, president and CEO of The Group Inc. real estate company, said in his annual real estate forecast that Loveland is set for even more rapid growth this year. The whole area around Loveland is! In Windsor, 323 more sales occurred last year than the year prior; Loveland saw 112 more sales last year; Fort Collins saw 110 more sales. The number of sales indicates that inventory was available to buy one way or another. Wells expects the number of homes sold in 2022 to be up 8% over 2021; on a national basis, the growth is expected to be 5%.
Riverside county has becoming a lower-cost alternative to nearby Los Angeles and Orange county. Most families in the LA metro area that are tired of the hustle and bustle of the populous area look to the area as a way to own a nicer home at a fraction of the cost.
The data is still being crunched for 2021, but anecdotally, realtors in Northern California seem to confirm that the migration patterns out of the Bay Area seem to continue in all directions. Many towns that are 1-2 hours away from the tech employment centers of Silicon Valley have seen increases in demand for homes.
Many people know Gilroy, the “Gilroy Capital of the World” about 30 mins south from San Jose, CA as well as Santa Rosa, CA, a gateway to Sonoma and Napa about an hour north of San Francisco. Tracy, CA has been a place for Bay Area workers to buy a decent house only 30 mins from the East Bay part of the Bay Area.
A sleepy and quiet town south of Gilroy has become an area of manicured neighborhoods and new constructions. Its downtown is now peppered with wonderful outdoor dining areas making a pleasant and walkable area for local diners and bar hoppers. Construction seems is showing no sign of stopping and surely the demand from Bay Area tech workers is helping this small town flourish.
Houses seem to be selling faster than ever before in Henderson, NV. The luxury mega homes are attractive to large families from the area that do not want to be “associated” with the casino mega-complex that Las Vegas has become.
A new study from Realtor.com reviewed home buying trends in January of this year (2022) and found that Henderson is rapidly running out of houses to sell. The price of homes for sales stayed at the historic high set in December, led by Las Vegas’ year-over-year increase of 35% in listing price to $460,000. San Jose, California, remained the most expensive market, with a median list price of $1,298,000. That was up 8.6% from the year before.
Once the small city with some of the highest crime in the state, Stockton is redeeming itself by becoming a great place for middle class stable wage earners to buy a home in California at lower prices. Located equidistant from Sacramento and the Bay Area, it’s an ideal place to be close to both urban areas without paying city prices.
Stockton, California, once one of the top three metropolitan areas hit hard by the U.S. housing collapse more than a decade ago – now ranks among the 10 most overvalued of the nation’s largest housing markets, according to a new analysis by professors at Florida Atlantic University and Florida International University.