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Cities in Pennsylvania saw the biggest price increases since August 2019
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Certain housing markets that saw significant price growth over the past four years may pose greater risks for potential buyers, an industry economist warned.
Homes within the cities of Allentown, Bethlehem and Easton in Pennsylvania have seen the largest price increases between August 2019 and August 2023, according to Realtor.com chief economist Danielle Hale. Hale analyzed the markets that saw the biggest price growth over the past four years among the top 100 metros.
Homes in the aforementioned areas saw prices jump nearly 74% over the past four years, according to Hale.
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Close behind was Knoxville, Tennessee, where home prices rose 62.7%. In Cape Coral and Fort Myers, Florida, there was an appreciation of 62.6% over the past four years, according to the data.
Prices for homes in Boise, Idaho, as well as in Portland and South Portland, Maine, also saw some of the biggest price gains in recent years.
These areas saw a lot of growth during the pandemic, fueled by people who were able to work remotely, which subsequently drove up prices.
Redfin CEO Glenn Kelman said the U.S. will have "a tough 2023" within the real estate market on "The Claman Countdown" Tuesday, Aug. 15, 2023. (Photo by Stephen Brashear/Getty Images for Redfin / Getty Images)
Hale noted that a lot of these markets are "either outright or relative to nearby areas." However, they are also relatively close to the major metros – like New York City or Philadelphia – in case workers need to be called back into the office.
Typically, when there is a "rapid run-up in prices" in certain markets, there is slower growth in subsequent years, Hale said.
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"These five areas have experienced the greatest price change in the last four years, which suggests that there have either been significant economic changes to support higher prices or the run-up is potentially unsustainable," she said.
A "FOR SALE" real estate sign. (Fox News / Fox News)
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This does not necessarily mean it is a bad idea to buy in these areas, but potential buyers and investors will not likely see "price appreciation driving equity growth," Hale added.
Although Hale has not projected that prices will decrease in these markets, they "certainly could."
Areas that have seen the biggest increase in price since before the COVID-19 pandemic:
1. Allentown-Bethlehem-Easton (PA): +73.8%
2. Knoxville, Tennessee: +62.7%
3. Cape Coral and Fort Myers, Florida: +62.6%
4. Boise City, Idaho: +59%
5. Portland and South Portland, Maine: +57.6%.