The past five years have been anything but typical for the U.S. real estate market. Since the start of the COVID-19 pandemic in 2020, home values have skyrocketed by 45.3%. This growth, which typically would have taken over a decade, occurred in just five years. The latest Zillow report highlights the impact of this surge and what it means for homebuyers and investors.
A Market in Motion – From Sun Belt to the Midwest
At the beginning of the pandemic, remote work led to a mass migration to the Sun Belt. Cities like Austin, Phoenix, and Miami became hotspots as buyers sought affordability and better lifestyles. However, by 2022, rising mortgage rates caused a shift in demand toward Midwest and Great Lakes markets, where homes remained more affordable.
Which Markets Saw the Biggest Gains?
Some metro areas experienced extraordinary home value appreciation in the last five years:
- Miami-Dade, FL: +61.1%
- Charlotte, NC: +58.2%
- Hartford, CT: +58.1%
- Tampa, FL: +58.0%
- San Diego, CA: +55.6%
These increases provided homeowners with substantial equity gains in a short period.
The Slowest Growing Markets
Not all cities experienced rapid appreciation. The bottom five metro areas for home value growth were:
- New Orleans, LA: +3.0%
- San Francisco, CA: +22.7%
- Minneapolis, MN: +27.3%
- Pittsburgh, PA & Baltimore, MD: +31.2%
Factors like high costs of living, shifting employment patterns, and local economic conditions played a role in keeping these markets subdued.
The Upside – And The Challenges
This rapid appreciation has resulted in significant equity growth for homeowners. However, affordability has taken a hit.
- Mortgage payments have increased by 80.6% since 2020.
- The average homeowner now pays $1,032 more per month than five years ago.
- In some cities, monthly mortgage payments have more than doubled.
For new buyers, affordability remains a growing concern as home prices and interest rates continue to climb.
Austin, TX – A Boom-and-Bust Market
Few markets have seen the volatility of Austin, Texas:
- In 2021, home values soared 40.3% in a single year.
- By 2023, the same market saw a 14% decline due to rising mortgage rates and increased new home construction.
Similar trends were observed in Tampa, Raleigh, San Francisco, and San Jose, with rapid appreciation followed by market corrections.
Why More Investors Are Looking at Mexico
With affordability declining in the U.S., many investors are turning to international markets like Puerto Vallarta, Bucerias, and Punta Mita.
Mexico offers:
✔ Luxury beachfront properties at a fraction of U.S. prices
✔ High potential for appreciation and rental income
✔ Stable investment opportunities in prime locations
At VR Realty, we specialize in presale investment opportunities in Puerto Vallarta. Buyers can secure prime real estate at below-market pricing, maximizing long-term appreciation.
📩 Interested in learning more? Contact us today to explore exclusive investment opportunities in Mexico!