Home prices have doubled in less than ten years in 68 of the 100 largest cities in the US, a sobering new study shows.
And in some major American cities, the cost of the average property has doubled in as little as five years.
In Detroit, home prices were half of what they are now as recently as 2019, data from real estate marketplace Point2 reveals.
Home prices in Miami and Tampa, Florida, have doubled since 2018, as they have in Baltimore, Maryland, and Spokane, Washington.
Buyers in Irvine, California – the most expensive housing market in the study – have seen average home prices double from an already steep $750,000 to $1.5 million in just seven years.
A storm of high inflation and interest rates, tight supply and surging demand has meant that the national median home price has yo-yoed toward around twice what it was a decade ago.
The cost of the average home in the US has gone up from around $200,000 to around $400,000.
According to Point2, a common home appreciation theory is that residential properties tend to double in value in about 10 years.
In the so-called ‘Motor City’ Detroit, one of the reasons that house prices have risen twofold in half this amount of time is because they have been historically low compared to the national average.
House prices in the city have been among the fastest-growing in the US in recent years, as the city bounces back from the mortgage crisis which left some homes virtually worthless.
Less than two decades ago, one in five houses stood empty in the city with foreclosures mounting and properties on deserted streets being sold for $1.
The crisis and the demise of the big carmakers – which had previously made Detroit an industrial powerhouse – drove millions from their homes.
But as the car industry – this time with a focus on electric vehicles – begins to pick up speed again, house prices have risen rapidly.
House prices in Detroit have been among the fastest-growing in the US in recent years, as the city bounces back from the mortgage crisis which left some homes virtually worthless
At the start of 2019 you could buy a home in Detroit for $40,000, according to Point2.
Now, according to listings website Realtor.com, the median home listing price in the city is $89,900.
Despite the short-term price surge, Detroit still remains among the more affordable of the major cities in the US.
Detroit was lagging behind other cities in terms of house price growth, according to CoreLogic chief economist Selma Hepp, so some of this growth is catch-up.
Similarly, data shows that prices also doubled quickly in Spokane, where not that long ago, in March 2018, a home cost just $184,500 – compared to $371,000 today.
Spokane has seen house prices surge as Americans have moved to the city amid investor interest and urban revitalization efforts.
And some people who fled to so-called pandemic ‘boomtowns’ such as Boise, Portland and Austin, later moved to Spokane in search of cheaper housing – which has driven up prices further.
Prices also doubled quickly in Spokane, where not that long ago, in March 2018, a home cost just $184,500 as compared to $371,000 today
According to Point2, home prices have accelerated just as dramatically in Miami, as well as in Tampa, amid a surge of new residents.
The past six years were enough for homes to double in cost to about half a million dollars in both cities.
Prices in all five of the largest markets in Florida – including Jacksonville, Orlando, and St. Petersburg – have doubled in just six to eight years.
Arizona is in a similar position – with seven large cities doubling in price between six and seven years.
Prices increased twofold in booming Scottsdale, where the average home costs a huge $837,500 compared to $416,000 at the end of 2017.
Phoenix has also seen a surge in home prices – which local incomes can barely keep up with.
Home prices have surged dramatically in Miami amid a surge of new residents
House prices in Tampa, Florida, have doubled in the last six years according to Point2
It comes as separate data shows the US housing market gained a huge $2 trillion in value in the last year alone, amid a historic shortage of homes for sale.
Soaring mortgage rates mean many Americans locked into lower deals have stayed put, leading to a significant inventory shortage.
This, in turn, has meant home values have continued to rise, pricing many Americans out of the market entirely.
While mortgage rates had been slowly declining in the first months of this year, the average 30-year fixed rate deal is beginning to creep up again.
Following data released earlier this week which showed inflation remains stubborn, the average 30-year mortgage deal rose to 6.88 percent, according government-backed lender Freddie Mac.
