By Randi Petrello
Home prices across the country are expected to rise over the next few years, albeit at a slower rate, according to a Demand Institute report.
Despite double-digit increases in home prices over the past two years, this won’t ring true for the future. These past price increases were driven by investors buying distressed homes to use as rentals, the report stated. Overall, home price appreciation will average 2.1 percent between 2015 and 2018, according to the report. The national median price in 2018 will still be shy of the 2006 peak prices.
Chicago ranked No. 7 among the 50 largest metropolitan areas expected to see gains in the median price of homes over the next few years. According to the report, the median price of a home here in 2012 was $175,000 and is expected to increase 16 percent to $202,000 in 2015, and up 29 percent to $225,000 in 2018.
According to Zillow, the median home value in Chicago today is $182,200. The median price of homes currently listed in Chicago is $264,000 while the median price of homes that sold is $278,700.
Memphis ranked No. 1 on the list, with an expected 20 percent increase from $118,000 in 2012 to $142,000 in 2015 and up 33 percent to $157,000 in 2018. Tampa was second, followed by Jacksonville, Fla.; Milwaukee; St. Louis; Baltimore; Detroit, New Orleans and Pittsburgh.
Among the worst places for home price appreciation are Washington, D.C.; Oklahoma City; Denver; Minneapolis; Phoenix; Cleveland; Raleigh, N.C.; Los Angeles; Miami; and Nashville. In D.C., home prices are expected to increase just 4 percent from $363,000 in 2012 to $379,000 in 2015 and up 7 percent to $387,000 in 2018.
In Raleigh, prices are expected to increase just 6 percent from $188,000 in 2012 to $199,000 in 2015, and up 13 percent to $212,000 in 2018. The current median list price in Raleigh is $200,000, according to Zillow. Home values are up 5.6 percent to $183,900.
By Randi Petrello