Photo Credit: Alamy Stock Photo
Over the past two decades, cities across the U.S. experienced intense makeovers. For some residents, such changes have meant rapidly appreciating property values, new jobs, and economic growth. For others, the development surge has led to sharp living cost increases in previously affordable areas.
Nationally, wage growth for production and nonsupervisory workers has lagged behind rising home prices since the early 2000s. According to Zillow, median home prices nationwide nearly doubled between 2000 and 2020, while BLS data shows that hourly wages have only grown by approximately 75 percent. Despite the dip in home prices during the Great Recession, the gap between housing costs and wages has been growing steadily since 2015.
While home prices increased by nearly 100 percent nationally between 2000 and 2020, some of the nation’s largest metropolitan areas—especially those in California—experienced increases of more than twice that. Home prices in both the San Jose and San Francisco metropolitan areas grew by more than 200 percent during that time. Further, the median home price in each of these locations currently stands at over $1 million, more than four times the national median of approximately $250,000.
At the regional level, the states with the biggest home price increases over the past 20 years tend to be located in the Northeast and the West Coast. Bolstered by rapidly rising home prices in metro areas like San Jose, San Francisco, and San Diego, home prices in California have increased 174 percent over the past 20 years. By contrast, the states where home price increases fall below the national average tend to be located in the South and the Midwest. The three states that experienced the least growth are Michigan (43 percent), Ohio (42 percent), and Illinois (39 percent).
An increase in median home price alone does not necessarily indicate a turnaround, though. To find the American cities that experienced the biggest turnaround in home prices over the past 20 years, researchers from Roofstock, a real estate investing platform, analyzed historical data from Zillow. They first identified cities whose home prices were below its parent metropolitan area’s median in 2000 and above it in 2020. Then the researchers ordered the remaining cities by their respective percentage change in median home price over that time period.
While most of the resulting cities are located in California and the Northeast, there are several outliers located in Colorado, too. Additionally, the list of cities that experienced the biggest turnaround in home prices over the past two decades includes both principal cities—the largest cities in each metropolitan area, such as Denver and Boston—as well as locations that surround them, like Arvada, Colorado and Quincy, Massachusetts.
Here are the 15 U.S. cities with the biggest turnaround in home prices over the past 20 years.
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
The COVID-19 pandemic has already caused massive migration shifts, with 22 percent of U.S. adults reporting that they either moved recently or know someone who did. Further research from Harris Poll suggests that many COVID-related moves are from cities to the suburbs or rural areas. A mass exodus, especially of higher-income residents, could slow or reverse the growth of home prices in some cities that have experienced sharp home price increases in recent years, ultimately making them more affordable for residents or investors who are currently priced out of the housing market.
The data used in this study is from Zillow. To find the cities experiencing the biggest turnaround in home prices, researchers compared each city’s median home price to that of its parent metropolitan area in both 2000 and 2020. Only cities whose median home price was below the metro median in 2000 and above the metro median in 2020 were included. Cities were then ordered by their respective percentage change in median home price over the same time period. Additionally, only the largest 1,000 U.S. cities with available data from Zillow were included in the analysis.
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