The national median home price has yo-yoed towards twice what it was ten years ago. The average home in the United States went from around $200k to $400k, molded by an unrelenting storm of inflation, tight supply, and surging demand. With that in mind, let’s gather around the fire and reminisce about an enchanted era when homes used to cost half what they do now. That magical time was… not even a decade ago.
Back then, demand had not yet intensified by a world-altering global pandemic, and the national home price hadn’t geared up for historical hikes. Generational housing dichotomy also wasn’t making headlines, and Millennials were just fresh-faced homebuyers anticipating a reasonably priced starter home. But, much like Millennials’ homeownership plans, a lot has changed since then.
Fluctuating mortgage rates, steep property prices, or supply deficits are no new challenges. But they have never unleashed such a rapid-fire onslaught on homebuyers in the U.S. as they have in today’s housing market.
So, with 20/20 hindsight and a shared regret for not buying years ago, we set out to answer one simple question: Did prices really double so fast? To find out, Point2Homes analysts looked at historical data to calculate how many years it took for home prices in the 100 largest U.S. cities to double and hit today’s market rates.
- Prices have doubled in less than 10 years in 68 of the country’s largest 100 cities. To rub salt in the housing wound, even as recently as 2019, Detroit homes were half of what they cost now.
- Home prices in sunny Miami and Tampa, FL, have doubled since 2018, as they have in Baltimore, MD, and Spokane, WA, potentially in light of investor interest and urban revitalization efforts.
- Buyers in Irvine, CA, have been holding onto their seats (and wallets) as home prices doubled from an already steep $750,000 to $1.5 million within the last 7 years.
- But price appreciation took its time in Anchorage, AK. Geographical constraints and a dwindling population have caused it to take as long as 21 years for home prices to double and reach today’s $359,000.
Homes Doubled in Price in Miami, FL, Tampa, FL, Spokane, WA, Baltimore, MD, and Detroit, MI since 2018-2019.
A common home appreciation theory is that residential properties tend to double in value in about 10 years. But this good news for investors spells bad news for buyers, considering that most of the country’s major cities had home prices double even faster than that.
For example, homebuying in Detroit, MI, used to be twice as feasible: At the start of 2019, you could buy a home in Detroit for $40,000 – yes, really. Similarly, data shows that prices also doubled quickly in Spokane, WA, where not that long ago, in March 2018, a home cost just $184,500 as compared to $371,000 nowadays.
Arizona is in a similar position, with seven big cities doubling in price in just six to seven years. Here, prices increased twofold in booming Scottsdale, where the average home costs a whopping $837,500 compared to $416,000 at the end of 2017. Phoenix even made headlines about its surge in home prices – and local incomes can barely keep up. Some attribute this to the state taking inspiration from neighboring California, whereas others blame it on supply-and-demand math gone wrong.
Speaking of California, as home to a University of California campus, multiple tech companies, and financial institutions, Irvine’s story of doubling price tags writes itself. Here, home prices ballooned to $1.5 million versus $750,000 back in 2017, making Irvine the most expensive big market in the U.S.
High-end Fremont is in a similar position: Cranked up by its proximity to Silicon Valley and the presence of big players like Tesla and Facebook, homes in Fremont went from $740k in late 2015 to double that ($1.5M) as of February this year. And reality is that overall desirability and high-paying jobs in these areas will only continue to drive up demand and prices.
Three Virginia Cities Join Anchorage and Urban Honolulu in the Slow Price Appreciation Club
Despite last year’s slight decline in home prices, homebuying costs weigh heavily on the minds of potential homebuyers. What’s encouraging is that there is no one-speed-fits-all, as home prices pick up sooner in some places than others. Meanwhile, not even the post-pandemic rapid rise in home prices sped up matters in some major cities.
Home Prices Accelerated Least Dramatically in Anchorage, Alaska, which took more than 21 years to go from $179,600 (in 2003) to $359,200 now. Likewise, it took more than 19 years for homes to double in cost in seven other major cities: Urban Honolulu, HI, Washington, D.C., Corpus Christi, TX, Virginia’s Arlington, Chesapeake, and Virginia Beach, as well as Brooklyn, NYC.
Various Factors Can Contribute to the Slowing Pace of Price Appreciation.
These can range from scarce new housing developments in Honolulu, to Alaska just being Alaska, making Anchorage a less active housing market. Or, from Brooklyn having exorbitant home prices to begin with, to concerns about sea-level rise in Chesapeake, VA.
Washington, D.C., and nearby Arlington both attract long-term investors interested in economic stability. Most are brought about by government-related employment. So, with a significant chunk of the population represented by transient professionals, students, and government employees, both cities are robust rental markets. This demand for rental housing may then provide stability to the overall housing market and reduce extreme volatility when it comes to homebuying.
In Half the Largest Cities, Single-Family Home Prices Doubled Faster Than the Overall Residential Market
Median home prices may have doubled at a neck-breaking pace, but historical data reveals that, in some cities, single-family dwellings doubled way faster than the overall housing market. In 45 of the country’s 100 major cities, the median price for single-family dwellings has doubled faster than that of all residential property types combined.
One of the main reasons behind single-family homes picking up pace much faster than other types of housing is, of course, the pandemic. The dropping number of new single-family homes compared to multifamily, the urban-flight trend, and cheaper loans led to a shift in housing needs and preferences. In turn, this brought about a surge in a “might-as-well” mindset among prospective homebuyers as more began to prioritize space and greenery.
Future Pricing Tough to Predict
With interest rates slated to decrease at least slightly, more potential buyers may be able to afford homes, leading to an even greater increase in the housing market’s demand. But if there’s one thing we’ve learned from recent (unprecedented) times, it’s that accurate pricing forecasts are getting tougher and tougher to make.
Alexandra is a Senior Real Estate Writer for Point2Homes. She has written extensively on various real estate topics, including renter demographic shifts, residential development, the dynamics of house rentals, market reports, and industry news. Her work has been featured in The New York Times, Bloomberg, Barron’s, Inman, Forbes, Architectural Digest, and MarketWatch, earning her bylines in various other industry publications. Alexandra can be reached at Alexandra.Ciuntu@Yardi.com.
Part of Yardi Systems, Point2Homes covers housing trends and news through comprehensive studies that draw from internal data, public records, governmental sources, and online research.