10 Markets Where Housing Prices Have Risen the Most

1. The San Francisco Bay Area

• Jump in price: 13.4% - 20.5%
• Median price: $300,000 - $925,000
• Change since 2006 peak: 1.7% - 32.4%
• Distressed sales: 6.5% - 24.6%
• Months' supply of inventory: 2.3 to 3.2
• Unemployment rate: 4.3% to 6.7%
• Rate of job growth: 1.4% to 3.2%

Demand has outstripped supply in the nation’s most-expensive housing market for decades. This is what happens when high population growth meets geographic and regulatory constraints on new housing construction. Yet another tech boom fueled by an influx of social media companies to the Bay Area (San Francisco, Oakland, Vallejo) are again driving up home prices, which have regained all but a small percentage (-1.7%) of the value lost since the peak of the market in 2006.

Workers seeking more-affordable housing have pushed up prices in the East Bay, including Oakland and Vallejo, although they have a ways to go to recapture value lost because of the foreclosure crisis and Vallejo's bankruptcy in 2008.

Inventory in the Bay Area is supertight. Homes sell in about a month or less, on average.But over the past year, sales have dropped slightly in the region but by almost one-fourth in San Francisco, diminishing that upward push on prices.

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2. The Central Valley of California

• Jump in price: 17.3% to 19.6%
• Median price: $175,000 to $427,500
• Change since 2006 peak: 27.2% to 39.1%
• Distressed sales: 25.4% to 28.8%
• Months' supply of inventory: 3 to 4.3
• Unemployment rate: 7% to 12.3%
• Rate of job growth: 0.5% to 2.5%

Behold the power of a price bounce-back. Rates of unemployment in the Valley's cities (Merced, Modesto, Salinas, and Stockton) are still higher than in California's coastal cities (Merced's is the highest, at 12.3%). But traditional buyers have returned, especially at the northern end of the valley, says Folsom, Calif., regional housing economist Greg Paquin. They're coming from--you guessed it--the Bay Area in search of affordable homes. The lower a city's median home price, the greater the increase in sales over the past year. Inventory is tight throughout the region.

The housing bust was brutal here. Buyers seeking affordability, investors betting on a quick flip, and easy lending practices had driven home prices far beyond what local economies could justify. When the bubble burst, prices plummeted and are still down by about one-third from their peak. And distressed sales (short sales and bank-owned properties) still make up about one-fourth of all home sales.

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3. Riverside-San Bernardino, Calif.

• Increase in home price: 15.9%
• Median price: $262,000
• Change since 2006 peak: -30.8%
• Distressed sales: 24.4%
• Months' supply of inventory: 4.1, Riverside; 4.5, San Bernardino
• Unemployment rate: 8.4%
• Rate of job growth: 2.8%

Located about 60 miles east of Los Angeles, the "Inland Empire" of Riverside-San Bernardino is a major distribution hub for the southwestern U.S. It has seen continual population growth, even during the housing crisis, as people have come for jobs and housing that is affordable compared with coastal Southern California, according to Marcus & Millichap, a commercial real estate brokerage company in Calabasa, Calif.

Home prices here are still down by almost one-third from their peak, and inventory still somewhat favors sellers. However, over the past year sales have flattened in Riverside and fallen somewhat in San Bernardino.

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4. Warren, Mich.

• Increase in home price: 13.4%
• Median price: $148,000
• Change since 2006 peak: -19.6%
• Distressed sales: 23.3%
• Months' supply of inventory: 2.7, Macomb; 3.3, Oakland
• Unemployment rate: 8.5%
• Rate of job growth: 0.4%

This area north of Detroit has benefited from newfound confidence in the Motor City metro area economy. “During the recession, a lot of our manufacturing base shrank,” says Vicky Rad, deputy director of the Macomb County Department of Planning and Economic Development. “Now, businesses are growing, investing and hiring.” With stronger demand from buyers and limited inventory, bidding wars erupted, homes have sold quickly, and home prices have spiked. In July, both Macomb and Oakland counties had sellers' markets, as Macomb had just 2.7 months' supply and Oakland had just 3.3 months' supply, according to Real Estate One, a brokerage company.

However, in July sales increased by just 3.5% in Macomb and fell (-5.5%) in Oakland from the year before, according to the Michigan Realtors. Would-be sellers may be heading into a slower, more normal market. "The wild activity stories that you are hearing may be becoming less plentiful," cautions Real Estate One.

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5. Boston, Mass.

• Increase in home price: 12.5%
• Median price: $379,950
• Change since 2006 peak: 0%
• Distressed sales: 3.7%
• Months' supply of inventory: 2.1
• Unemployment rate: 5.2%
• Rate of job growth: 1.6%

Skyrocketing rents are driving many first-time home buyers and investors into Boston's housing market. With just 2.1 months' supply in greater Boston and the inventory of homes for sale falling, the pickings are slim. Bidding wars have erupted in choice neighborhoods, such as Brookline, Cambridge, Charlestown, downtown and South Boston. "They've driven the average sale price to 5% over the asking price," says Mark Hickey, a real estate economist with the Boston-based CoStar Group.

Hickey doesn't think prices are overheated because, after the bust, they stayed flat for so long that they're still far below their historical growth rate. They may flatten again, though, as higher prices push home buyers to look further afield (this may already be happening, as sales fell by 5% from a year ago in June). Homeowners may realize their market is hot and choose, finally, to put their homes up for sale, which could increase inventory.

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6. Santa Rosa, Calif.

• Increase in home price: 12.3%
• Median price: $434,250
• Change since 2006 peak: -20.8%
• Distressed sales: 10.9%
• Months' supply of inventory: 3.1
• Unemployment rate: 5.3%
• Rate of job growth: 3.7%

A gateway to the wine country of Sonoma and Napa counties, Santa Rosa's burgeoning “grape” economy provides retail, medical and other services to growing numbers of retirees who have resettled from the more expensive Bay Area, as well as "pre-retirees" who vacation in the area. The rate of job growth here is even higher than in the Bay Area.

The metro area has seen successive waves of investors, first-time home buyers and, most recently, move-up buyers, all looking for deals and driving up prices. However, Sally Crain, president-elect of the North Bay Association of Realtors, in Santa Rosa, says that rapid price increases have mostly stopped and that the housing market is more normal than it has been in a long time. Sellers still enjoy an advantage with tight housing inventory (3.1 months' supply in June), and sales remain reasonably quick. The recent earthquake could also impact sales.

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7. Santa Barbara, Calif.

• Increase in home price: 12%
• Median price: $470,000
• Change since 2006 peak: -22%
• Distressed sales: 14.1%
• Months' supply of inventory: 4
• Unemployment rate: 5.4%
• Rate of job growth: 0.6%

Real estate in these charming Pacific coast towns (including Santa Maria) attracts both investors and second-home owners. Available inventory (4 months' supply in June, which favors sellers) is below the national average, says Mark Schniepp, an economist in Santa Barbara. And faced with scarce, expensive land, as well as significant regulation, builders won't build many new homes.

Typical Santa Barbara home prices range from $750,000 to $2 million, Schniepp says. Santa Maria, which has somewhat more land available for development, has a more affordable median home price in the high $200s.

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8. Myrtle Beach, S.C.

• Increase in home price: 11.7%
• Median price: $175,000
• Change since 2006 peak: -22%
• Distressed sales: 16.7%
• Months' supply of inventory: 8.3
• Unemployment rate: 5.5%
• Rate of job growth: 4.3%

Home prices have seen a solid uptick in these sunny beach-and-golf towns over the past year, says Laura Crowther, CEO of the Coastal Carolinas Association of Realtors. Distressed sales are down. But buyers of primary residences, vacation homes and investment properties still have the advantage, with 8.3 months' supply of single-family homes and 11 months' supply of condos. In June, single-family home sales rose by 10% from a year ago, while condo sales fell slightly (by about 2%). And there's a good bit of new construction, says Crowther. Ample supply could undercut future increases in home prices.

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9. Ann Arbor, Mich.

• Increase in home price: 11.4%
• Median price: $194,000
• Change since 2006 peak: -10.5%
• Distressed sales: 16.6%
• Months' supply of inventory: 5.7
• Unemployment rate: 5.7%
• Rate of job growth: 1.6%

The University of Michigan drives much of Ann Arbor’s local economy and insulated it from the worst of the housing crash. Drug manufacturer Pfizer left town in 2007, but the university’s aggressive real estate development projects and ongoing recruiting efforts for faculty and staff continue to attract a steady stream of new residents, shoring up demand. The housing supply has been tight, particularly for newer homes.

The 2006-07 housing market crash brought new construction to a halt. Buyers were left to snatch up what was left, often with stiff competition and at higher prices. But most of the stalled construction projects have since taken off, which should bolster the supply of new homes. Residential listings have increased by almost one-fourth, while sales have fallen a bit over the past year. In June, Washtenaw County had 5.7 months' supply of homes, close to the national median of 5.5 months and within the range of balanced between buyers and sellers. Those trends should diminish upward pressure on home prices.

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10. Las Vegas

• Increase in home price: 11.4%
• Median price: $179,900
• Change since 2006 peak: -39.1%
• Distressed sales: 24.9%
• Months' supply of inventory: 5.2
• Unemployment rate: 7.9%
• Rate of job growth 3.1%

What happened in Vegas epitomized the housing bust. It was a tale of overbuilding, rampant flipping and subprime lending, followed by recession, with sharp increases in local unemployment and foreclosures.

"But we survived, and we're back!" says Heidi Kasama, president of the Greater Las Vegas Association of Realtors. She gives price benchmarks for boom, bust and recovery: At the peak of the market in Las Vegas, the median home price was $315,000. In early 2012, it bottomed at $118,000. This spring it was approaching $200,000. "We've seen rapid run-ups in prices year-over-year, but that's because we were so undervalued," says Kasama. Home prices are still down by 39% since the peak, and in the past few months, she says, price increases have been diminishing. Sales have fallen by 10.2% from the year before, too. Supply is balanced between sellers and buyers.

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