Currently, the markets with the greatest asking price gains are those that are recovering from strong price declines during the recession. However, this is likely to change over the coming year with employment playing a larger role in price movement across the country, according to the Trulia Price Monitor for December.
On the other hand, the Trulia Rent Monitor demonstrated an alignment of rising rents and rising employment rates.
The 10 markets with the greatest annual price gains in December experienced price declines of at least one-third from peak to trough during the housing crisis, according toTrulia, which tracks asking prices across the country. When it comes to employment growth over the year, however, the company’s study shows these markets vary widely.
Las Vegas, Nevada, posted the highest increase in asking prices in 2013 with a 33 percent gain. The market also demonstrated relatively strong employment growth at 2.4 percent.
Sacramento, California, ranked second with a price gain of 28.2 percent and employment growth of 1.5 percent.
However, the next two markets on the list—Riverside-San Bernardino, California, and Oakland, California—posted price gains in excess of 25 percent with employment gains of less than 1 percent.
While the markets topping the list for asking price gains were all hard-hit markets during the housing crisis, the markets that posted the smallest annual price increases or price declines in December “all had a milder housing bust,” according to Trulia.
Albany, New York, and Baton Rouge, Louisiana, both posted price declines for the year. Little Rock, Arkansas, saw no change in asking prices. Employment growth in these three markets varied from 0 to 1.8 percent.
“[Y]ear-over-year price gains in December 2013 are still primarily a reaction to the housing bust, but this rebound effect is fading as we enter 2014,” Trulia noted in its report.
The correlation between drastic crisis price declines and extreme recent gains is already waning, according to Trulia’s data. “Looking at the quarter-over-quarter price changes throughout 2013, the relationship between the severity of the housing bust and the recent price recovery was stronger earlier in the year than later in the year,” Trulia said.
On the other hand, rents did expand more notably alongside employment, Trulia reports. Among the 25 largest rental markets in the country, four of the five that experienced the greatest annual increases in rent prices in December also posted employment growth of at least 2 percent.
San Francisco, California, topped the list with a 10.6 percent annual rise in rents and a 2.4 percent increase in employment. Portland, Oregon, followed with rents rising 10.5 percent and jobs growing by 2 percent.