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Real Estate Big Data

America’s top 25 most future ready cities

The future readiness of a city depends less on geography and more on education and economies locally. Is your town in the top 25 list? There were some surprises on the list for sure!

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According to Dell’s recent Future Ready Economic Model, San Jose, San Francisco, Washington D.C., Boston and Austin, are America’s most future-ready cities.

But what does it even mean to be the most future ready city? The more future ready a city is, the more they are prepared to handle economic growth; and there are three characteristics that the 2015 Strategic Innovation Summit identified as determinants if a city is prepared:
• The ability to attract people who are engaged in and open to lifelong learning that drives innovation.
• Businesses that thrive in collaborative environments
• Infrastructure that provides platforms for people to engage, collaborate, learn and innovate.

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Education plays a big role

Dell hired IHS Economics to find proxy indicators that properly defined those characteristics, which resulted in the list. So, San Jose, San Francisco, Washington D.C., Boston and Austin are the top four cities that met those characteristics, and are henceforth more future-ready.

This ranking, along with 20 other cities, comes from the Dell Future Ready Economics model that was decided on at the 2015 Strategic Innovation Summit: Enabling Economies for the Future, hosted by Harvard University.

The rankings didn’t provide a formula, or formal explanation for achieving future readiness, however education is an obvious factor. The top four cities on the list, were the same cities with the highest number of undergraduate and graduate school degrees.

Location is less relevant than economies

The index also revealed that future readiness is not based on location, or having “better” economies, but instead relies on the specific strengths of a particular economy, and capitalizing on them. Louisville, which is number 18 on the list is a good example of this.

James Diffley, IHS Economics Group Managing Director for U.S. Regional Services said “For instance, Louisville was impressive. They seem to be set up to take advantage of natural advantages they have… Is Louisville going to do better than San Jose? No, but I think Louisville will get the best out of their potential.”

The 25 most “Future Ready” economies

Again, there are 25 total American cities that made the list (listed below), but Dell and HIS fully intend to release an international ranking index, in the next few months. Here are the 25 Future Ready Economies:

1. San Jose, CA
2. San Francisco, CA
3. Washington, DC
4. Boston, MA
5. Austin, TX
6. Raleigh, NC
7. Seattle, WA
8. Denver, CO
9. Portland, OR
10. Dallas-Fort Worth, TX
11. New York, NY
12. Minneapolis-St. Paul, MN
13. Houston, TX
14. Atlanta, GA
15. Charlotte, NC
16. San Diego, CA
17. Chicago, IL
18. Louisville, KY
19. Salt Lake City, UT
20. Des Moines, IA
21. Los Angeles, CA
22. Pittsburgh, PA
23. Kansas City, MO
24. Columbus, OH
25. Philadelphia, PA

#BringItOnFuture

Photo courtesy of NormLanier

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Real Estate Big Data

Home values are on the rise – What will homes be worth in 2023?

(BIG DATA) The housing market is on fire. Will we continue to see home values increasing over the next 2 years? This prediction poll has the answers.

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Houses representing increasing home values.

Ask 12 experts in real estate about the future of home values and you’ll probably get 20 or more different opinions. With mortgage rates rising, the housing market is expected to slow down, but that doesn’t mean that home values are going to decline. Here’s one prediction from GOBankingRates about home values in 2023.

Predictions for Home Values

GOBankingRates used the median home value rate to predict what home valuations will do over the next year. The median home value is the property’s actual valuation, not the list price or home price. It’s interesting to note that there were no predictions in which home values would decline. In most states, home values should increase by 10% or more. Only three states, Louisiana, North Dakota, and Alaska, had predictions of less than 10%. Some states, Utah, Florida, and Arizona had a prediction of over 20% gain.
Here are some of the predictions:

  • Texas – the median home value in 2022 is $290,527. The projected home growth is 15.29%.
  • West Virginia, the state with the lowest median home value of $129,518 has a projected one-year growth rate of 10.39%.
  • Tennessee – with a median home value of $276,250 in 2022, the projected growth rate is 18.19%.
  • Florida – the 2022 median home value is $373,735. By 2023, the projected home value change is 22.04%.
  • Hawaii – the state with the highest median home value of $972,147 has a projected growth rate of 16.65%.

This information is valuable for both homeowners and home buyers. Read the report and find your state here.

The real estate market is promising

Although there were concerns that the pandemic would cause a housing crash, what we’re seeing is much different. It’s not even the housing bubble of 2008. Housing prices are rising because of a lack of supply and increased demand. There’s less likelihood of foreclosure today than 15 years ago, due to more stringent requirements. The housing market looks good, not just into next year, but hopefully over the next decade and more.

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Real Estate Big Data

Median home prices hit $407K, home sales fall 3.4%

(REAL ESTATE NEWS) Home sales dip for a fourth consecutive month in May – what does this mean for the housing market going forward?

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home sales

For the fourth consecutive month, existing home sales (real estate contracts signed) fell 3.4% in May from April, and slumped 8.6% from a year ago, according to the National Association of Realtors (NAR). The average days on market fell from 17 days in April (and May 2021) to 16 days in May, and 81% of all homes listed sold in under a month.

The median home price rose 14.8% over the last year to $407,6000, the first time it has ever exceeded $400K. May marks the 123rd consecutive month of annual increases, the longest-running streak in history.

Inventory remains tight, but did rise 12.6% from April to 1.16 million by the end of May, marking a 2.6 month sales pace. Inventory is down 4.1% from May of 2021.

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist, Dr. Lawrence Yun.

“Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions,” Dr. Yun added.

He notes that it is expected that home sales in coming months will continue to decline in light of rising mortgage rates, yet appropriately priced homes will continue to sell quickly.

First time buyers made up 27% of sales in May, down from 28% in April. This diminishing number remains troubling, as the average hovered around 33% for years, and was at 31% in May 2021.

All-cash sales rising to 25% (up from 23% in May 2021), and individual investors or second-home buyers accounted for 16% of sales in May.

“Declining home purchases means more people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties – placing additional financial strain on prospective first-time homebuyers,” said NAR President Leslie Rouda Smith.

“To counter this trend,” Rouda notes, “policymakers should consider incentivizing an inventory release to the market by temporarily lowering capital gains taxes for mom-and-pop investors to sell to first-time buyers.”

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Real Estate Big Data

NAR Chief Economist predicts housing market uncertainty

(BIG DATA) Warning bells on the housing market have been ringing for over a year. While this prediction isn’t a surprise, it’s disappointing news.

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Multitude of colorful homes representing housing market.

The housing market is booming. Many experts are concerned about another bust like we experienced in 2008, but the conditions are much different today. Homeowners aren’t extended like they were when the market crashed in 2008. National Association of Realtors® Chief Economist Lawrence Yun suggests that the housing market is still uncertain, even though he says, “housing kept the economy afloat” during the pandemic.

What is impacting the housing market? 

Yun cites record-low inventory and inflation as “curveballs” to the housing market. Many economists, including Yun, have been concerned about low inventory for many years, especially in certain markets. Even though builders are working hard to construct new residences, supply chain and labor issues are not accelerating the process.

Yun is more concerned about inflation impacting the housing market. He says,

“wages have risen by 6% from one year ago…but inflation is 8.5%.”

Rising mortgage rates have made mortgages cost $300 to $400 a month more, according to Yun. Many working families can’t afford that. Yun predicts inflation is going to be high for several months. The market will slow as the Federal Reserve raises rates.

Yun also cites the Russia-Ukraine war as another contribution to the uncertainty of the market. The war is also driving inflation, not just overseas, but in the United States. With gas prices climbing higher each week, this is impacting the housing market.

Is real estate a good investment in this market?

Last year, when Yun opened the Residential Economic Issues & Trends Forum at NAR’s annual REALTOR® Conference & Expo in San Diego, he expected the “housing sector’s success to continue,” but he did suggest that 2022’s performance wouldn’t exceed 2021s.

“Rising rents will continue to place upward pressures on inflation,” he said. “Nevertheless, real estate is a great hedge against inflation.”

There’s a lot we don’t know about the future. It’s disappointing to think that the housing market may be uncertain, but real estate is still a good investment.

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