68 KIPLINGER’S PERSONAL FINANCE^ 04/2020
the National Association of Home
Builders (NAHB), says that builders
have been grappling with rising
costs of land, labor and building
materials, plus a labor shortage of
about 300,000 skilled workers. But
the NAHB projects that 920,000
single-family houses will be built this
year—close to the 1 million homes that
will have to be constructed annually
to pull the nation out of its housing
shortage, Dietz says.
The median price tag of newly built
homes climbed to $331,400 in Decem-
ber, less than a 1% year-over-year
bump, according to data from the
Department of Housing and Urban
Development and the U.S. Census Bu-
reau. Most new homes being built are
for move-up home buyers, Dietz says,
but a growing number of homebuild-
ers are beginning to focus on building
houses for first-time buyers.HOT MARKETS
Of course, some housing markets
are seeing bigger price gains than
others. Salt Lake City, New Orleans
and Knoxville, Tenn., had the highest
home-price appreciation. Boise, Idaho,
also had a double-digit jump. “Our
inventory is the lowest it has been
in 19 years,” says Boise real estate
agent Sheila Smith. “We’ve been
seeing a huge exodus from [the West
Coast] to Boise, largely because the
cost of living here is so much more
affordable.”
Denver’s price increases slowed
in 2019, but—from January 2010 to
December 2019, the city’s median
home price swelled from $202,896
to $424,051, a price increase of 11.2%
per year, according to a December re-
port from Redfin.
The downside? Tight supply coupled
with rising living costs has eroded af-
fordability in some areas, particularly
in California. Nationally, home buyers
need 7.2 years to save for a 20% down
payment on the median-priced home,
but home buyers in Los Angeles need
18.4 years, a recent Zillow report found.
“Homes on the West Coast just aren’tThe table shows changes in prices for ex-
isting homes (single-family houses and
condos) for the 100 largest metro areas
tracked by Clear Capital as of December
31, 2019. In addition to the one-year
change, we show the change in home
prices since the peak of the national mar-
ket in mid 2006 and since the bottom of
the market in early 2012.
The median home price (half of all
homes sold cost more, and half cost less)
of a residential property as of December
31 was $253,000, according to Clear Capi-
tal. Home prices rose 5.7% in 2019, com-
pared with an increase of 7.4% in 2018.
Prices in more than one-fifth of the 100
cities have doubled since then, led by Salt
Lake City, New Orleans and Knoxville,
Tenn. Cities that cooled in 2019 include
Jackson, Miss., Kansas City, Mo., Bridge-
port, Conn., and San Jose, Calif.
The affordability index shows the rel-
ative affordability of cities (on a scale of
1 to 10; 1 is the most affordable, 10 is least
affordable). It’s based on the percentage
of annual income required to buy a me-
dian-priced home in each metro area in
late 2019.
At the end of 2019, home prices rose
faster than wages and rents in two-thirds
of the 855 counties analyzed by Attom
Data Solutions. Yet owning a three-bed-
room home is more affordable than renting
a median-priced home in more than half
of those markets. Attom’s analysis shows
ownership is more affordable in less-pop-
ulated counties and renting more afford-
able in urban areas. Cities with more than
1 million people where it’s still more af-
fordable to buy a home than rent include
Cleveland, Detroit and Philadelphia.Home Prices
in 100 Cities
Housing SnapshotREWARDS
KipTipFind Out What Your
Home Is Worth
All real estate is local, so the median
home price in your metro area is only
a broad indicator of overall trends.
Unfortunately, many homeowners
misjudge the value of their home, la-
ments Indianapolis real estate agent
Chris Dossman. “You can’t just look at
what your neighbor’s house sold for and
assume that your home is the same value
as theirs,” Dossman says. “For example,
how old is your neighbor’s roof compared
to yours? How old are their appliances?
You can look at pictures, but pictures
don’t tell the whole story.”
There’s no shortage of online home-
value estimators—and they can be a
good starting point—but their estimates
can vary significantly depending on their
methodology. For example, Zillow esti-
mates that its error rate for homes not
currently on the market is about 7.5%.
Your best approach when assessing
your home’s value? Look at homes within
a one-mile radius that sold within the
past 30 to 60 days that are similar to
yours in terms of square footage, the
number of bedrooms and bathrooms,
and home improvements. (You can
search for recently sold houses at sites
such as Zillow, Realtor.com and Redfin.)
Take the average sales price of three or
four homes to gauge your home’s value.
Essentially, you’re doing a compara-
tive market analysis, or “CMA,” in which
you’re looking at comparable properties
(“comps” in industry lingo)—which is how
real estate agents recommend listing
prices to home sellers.
Want an expert’s opinion of how much
your house is worth? Consult a real es-
tate agent—many offer complimentary
home appraisals—or consider hiring a
professional appraiser to assess the
value of your home. A typical home ap-
praisal costs between $300 and $400,
according to HomeAdvisor.