Most In Demand U.S. Housing Markets

Even if housing prices haven’t fully recovered, there’s one thing for sure — people are looking to buy again. According to a real estate consulting firm, demand exceeds supply in 90% of America’s major markets.

John Burns Real Estate Consulting determined the housing demand/supply balance by measuring job growth (as a proxy for household formations) to new home construction permits, or the E/P ratio, according to Business Insider.

According to John Burns, the standard E/P equilibrium level should be 1.2. Not only are 18 of the top 20 U.S. markets well above that level, but the national ratio is as well at 2.5. The only two markets below the equilibrium are Miami, Fla., and Raleigh, N.C. Some cities are showing job growth exceeding permit growth by factors of five or seven.

“It is important to note that in most markets elevated E/P ratios are primarily the result of historically low housing supply, rather than strong job growth,” Adam Artunian wrote. “Price appreciation will be even more closely tied to job creation as new supply comes online and mortgage rates continue to rise to more historic norms.”

So which markets are showing low housing supply and driving demand?

10. Denver, Colorado

Population: 619,968

Median home price: $248,600

Unemployment rate: 7.3%

The Denver housing market was expected to see big gains in home prices this year, according to Zillow. However, Colorado in general had one of the worst state foreclosure rates with 1 in every 563 homes being foreclosed on.

9. Tampa, Florida

Population: 346,037

Median home price: $122,400

Unemployment rate: 7%

Florida’s housing markets haven’t had an easy time since the financial crisis. At the end of 2012, the state had the worst foreclosure rate with 1 in just 312 homes being foreclosed on.

8. Phoenix, Arizona

Population: 1.47 million

Median home price: $153,100

Unemployment rate: 6.8%

Phoenix was actually expected to have the largest growth in home values with a whopping 8.5%. Plus, at the end of 2012, Phoenix’s workers experienced one of the best pay increases year over year.

7. Atlanta, Georgia

Population: 432,427

Median home price: $128,000

Unemployment rate: 9.6%

Those looking to buy a house in Atlanta might like to know that Georgia is the most expensive state to own and operate a car and it doesn’t have the best public transportation options. Plus, as of the beginning of this year, foreclosures were still on the rise.

6. Nashville, Tennessee

Population: 609,644

Median home price: $146,000

Unemployment rate: 6.8%

Nashville is the one of the best cities in the country for retirees — it’s a good place to live for a working retirement, plus it’s affordable.

5. Los Angeles, California

Population: 3.82 million

Median home price: $466,900

Unemployment rate: 10.3%

California’s housing market had really been hit during the housing market crisis and had some of the highest foreclosure rates. However, Zillow expected Los Angeles to have a big comeback with 3.5% growth.

4. Minneapolis, Minnesota

Population: 387,753

Median home price: $179,600

Unemployment rate: 4.7%

At the end of 2012, workers in Minneapolis experienced a 3.7% pay increase year over year. However, those close to retirement should beware — the state is one of the worst places to retire based on taxes, temperature and hospital beds per 1,000 patients. Although young couples also should know that Minnesota is one of the most expensive states to raise a child.

3. New York, New York

Population: 8.25 million

Median home price: $460,200

Unemployment rate: 8.3%

New York City doesn’t come cheap. The city home to some of the most expensive ZIP codes in the country and it’s not particularly forgiving to physicians — New York had the largest total of medical malpractice payouts in 2012.

2. Boston, Massachusetts

Population: 625,087

Median home price: $395,800

Unemployment rate: 5.9%

Despite having high demand for housing, Boston is not a cheap place to live, whether you’re driving a car or paying for everyday items. However, there’s no denying that Bostonians have a huge sense of pride in their city. And, as doctors know, the city is home to Harvard, which is not just the best medical school in the U.S., but the best in the world.

1. Chicago, Illinois

Population: 2.7 million

Median home price: $157,800

Unemployment rate: 10,3%

While demand may be high for housing in Chicago, prospective homeowners should consider this: The Chicago metro area has one of the biggest prospective housing bubbles based on unemployment increasing while housing prices also increase.