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Personal Finance > Your Home
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America's hottest housing markets
Steady jobs, local arts,and bargains are pushing prices up double digits.
August 6, 2002: 3:53 PM EDT
Leslie Geary, CNN/Money Staff Writer

New York (CNN/Money) - Every homeowner, or home hunter, knows housing prices keep shooting up. And while prices vary widely -- from a median of $76,800 in Beaumont-Port Arthur, Texas to an eye-popping $482,300 in the San Francisco Bay area -- the rate at which home costs are rising has stunned buyers and sellers.

Nationwide, home prices rose an average of 8 percent from a year ago in 120 metro areas surveyed by the National Association of Realtors. But 10 of those markets have far surpassed that with average price hikes of up to about 25 percent.

Not surprisingly, housing costs have gone up rapidly in crowded, bustling cities like New York and Boston and their surrounding suburbs. But other places on the top 10 list aren't exactly known for their crushing density. In these communities a variety of factors -- from a more tranquil way of life to stable local economy to burgeoning arts scenes plus, ironically, low housing prices -- are attracting buyers and pushing prices higher.

Worcester, Mass.

Increase: 25.2 percent

Metro area stats

Five years ago, Worcester, Mass., was a struggling city. Few home buyers were looking in the former industrial community or to its surrounding suburbs in central Massachusetts. Houses frequently sold below their assessed value.

Not anymore.

Housing prices in the Worcester metro area -- including Auburn, Millbury and Paxton -- have shot up 25.2 percent over the year, first quarter sales figures show. And there's no sign that the trend is gong to slow anytime soon.

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Fortune: National home price appreciation map
  

These days, a median-priced single-family home in the city and surrounding suburbs sells for $170,300, though it's not uncommon for three-bedroom, two-bath capes and colonials to fetch $225,000 to $300,000.

That's a great deal considering "you can't buy a blade of grass in Boston for $300,000," says Rosaline Levine, past president of the Greater Worcester Board of Realtors. "We are now the place to be."

People who work in Boston, which is about 50 minutes away by train, find they can live comfortably in houses they'd never be able to afford closer to the city, where the median price runs a healthy $358,000.

Worcester's older residents and retirees also have been buying. They typically sell their homes to new families and move into single-story ranch houses where they hope to spend the rest of their lives. There are plenty of multi-family buildings on the block, too, and families are scooping them up, says Levine.

The region's dozen or so colleges have also attracted residents and many graduates from local institutions, such as the University of Massachusetts Medical School, Holy Cross and Tufts Veterinary School, are staying in the area.

Atlantic City, NJ

Increase: 21.8 percent

Metro area stats

It's hard to decide what's more surprising: the nearly 22 percent surge in housing prices to a median of $133,700 in the Atlantic City metro area or the fact that this New Jersey community has residential housing at all. Atlantic City means casinos and Miss America, right?

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As it turns out, you're right. This city "is not that residential" says Sandy Rigolizzo, president of the Atlantic City & County Board of Realtors.

But neighboring communities, she adds, such as Mays Landing, Galloway and Egg Harbor "are all very residential."

In fact, it's those communities -- whose housing prices are included in the Atlantic City area -- that are attracting lots of buyers. In particular, individuals are scooping up second homes on or near the Jersey Shore.

Those putting down permanent roots in the area often find that housing can be cheaper than Northern New Jersey, New York City, Trenton or Philadelphia -- areas that are an easy commute away, says Rigolizzo.

That's not to say no one's moving to Atlantic City. In fact, its commercial growth is expected to attract buyers to its city limits and to surrounding communities. A $1 billion casino, the Borgata, is expected to open next year. It will be the first opening of a casino in more than a decade. Meanwhile existing hotels and casinos, such as the Showboat Casino Hotel, are expanding. When these projects are complete, more workers -- and homebuyers -- should come to the area, says Rigolizzo, who insists these individuals will still be able to afford to buy in the area.

Providence, RI

Increase: 19.3 percent

Metro area stats

Not even a high-profile political scandal can dampen housing prices in Providence.

In this city, where the mayor, Vincent Cianci, Jr., was just recently convicted on federal racketeering charges, homes are selling briskly and prices are booming at double-digit rates.

The reason?

Sharon Steel, president of Rhode Island Association of Realtors, credits Providence's "incredible Renaissance" for the appeal.

Whatever the reason, this New England city and its surrounding communities are luring artists, young families, professionals and purchasers who have the means to buy second homes. The city's even inspired a television show.

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Developers also are finding sweet deals. Many, in fact, have found they can qualify for property tax breaks if they convert old textile mills into lofts where artists can live and work. (The program is credited to Cianci.) This has helped Providence " develop its own version of New York City's SoHo. (In Providence, it's called Pro-Ho.") where tourists and residents alike can browse among cafes, galleries and shops.

The city is pushing hard to bill Providence as the new place to be by hosting ongoing "Gallery Nights" where free trolley car rides ferry individuals to the city's hot art spots. Young artists looking for kindred spirits will find plenty at Rhode Island School of Design.

But a thriving art scene isn't the only thing that's moving more people rapidly into Providence. Last year, Amtrak's high-speed train, the Acela, began running between Boston and Washington, D.C. (stopping in Providence, among other places). Now it's possible to go from Boston's South Station to Providence in roughly 30 minutes.

Many professionals find that even in Providence's more expensive areas of the east side, where prices can typically range to $389,000, housing is cheaper than similar areas of Boston's suburbs, such as Wellesley. Other parts of Providence and surrounding communities have a median housing tab of $120,000, says Steele.

Topeka, KS

Increase: 18.25 percent

Metro area stats

Anyone who thinks Kansas is just farm country is in for a big surprise.

These days, a mix of employers are setting up shop and that's helped communities like Topeka enjoy a nice housing boom. These days, a 2,000 square-foot single family home runs from $90,000 to $120,000. That's up from about $78,000 five years ago.

"It's a nice, healthy increase," says Brady Robb, president of the Topeka Board of Realtors.

Robb says two factors are probably pushing prices. New jobs that attract new residents and a thin housing supply. He points to such companies as Target Corporation, which just broke ground on a 1.3 million-square-foot distribution center and will initially hire 650 people. They'll need places to live and Robb thinks it will take more than a year for the supply to catch up.

Other employers in Topeka include the Goodyear plant, a Payless ShoeSource distribution center and headquarters, Frito-Lay, Fleming Foods and Burlington Northern Santa Fe railroad. Many residents also work for the state and federal government, which provides stable jobs, says Robb.

"We don't get the kind of swings you see in other places," he notes.

Tucson, AZ

Increase: 17.4 percent

Metro area stats

Sunny weather. Golf. Spas.

That's all great, but Tucson offers much more, say housing experts who've seen buyers moving into to this Western city for two seemingly opposite reasons: retirement and work.

"I think people move here because of job opportunities, and once they get here they find it's very easy to find a house," says Paul Lindsey, president of the Tucson Multiple Listing Service Board of Directors.

In the past year, prices in the Tucson metro area rose by 17.4 percent to a median of $137,600. That price will buy, on average, a three-bedroom, two-bath home.

The city has encouraged some of the growth by backing several first-time buyer programs. There's also a county lease-to-purchase program to help individuals with less-than-perfect credit become home owners, said Dan Santa Maria, president of the Tucson Association of Realtors.

"There's a lot of assistance with down payments and a lot of assistance with closing costs," Santa Maria added.

Tucson's economy also is getting a healthy boost because the city is attracting new industries, such as aerospace and biotech, that are seeing real job growth, notes Steve Weathers, president and CEO of the Greater Tucson Economic Council.

Raytheon Missile Systems, Bombardier Aerospace and Universal Avionics, for example, are among the 80 or so aerospace companies in the area. It has also attracted a fair share of biotech firms including Niadyne Inc., ProIx Pharmaceutical, which is moving there this year, and ImaRx Therapeutics Inc.

Of course, it's impossible to forget the fact that Arizona has long been a destination spot for retirees, and it still is. Retirees continue to buy in Tucson. After all, the city has got plenty of good weather and recreational opportunities.

And if they fail to entertain, a Mexican vacation isn't far, either  Top of page




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