The Cities With the Highest Profitability of Housing in the Last 30 Years

Contrary to popular belief, real estate hardly outstrips inflation over time. On the other hand, it is difficult to make such generalizations, because in some areas, housing has made huge profits. Trulya scanned 100 metro districts to find the highest and lowest rated home values.

They looked at annual house prices for the past 30 years – from 1986 to 2016 – using information from the FHA House Price Index, as well as their own calculations.

Unsurprisingly, they found San Francisco to see the highest value increases. In 1986, the average home price in the San Francisco metro area was $ 160,955. At about that time, this amount was similar to those in Cambridge, Massachusetts and Fairfield County, Connecticut. But in 2016, the median home price in San Francisco was $ 1,058,474, up 557%. This is an average annual return of about 6.5%.

In contrast, Rochester, NY, showed the lowest return on home value. In 1986, the median home price was $ 68,594, and in 2016 it was only $ 12,875. That’s an 85% change – an average annual return of about two percent.

According to Trulia, including San Francisco, here are the 10 urban areas with the highest residential growth since 1986.

Trulya looked at economic factors to find out why these were the areas that saw the highest growth. According to their estimates, this is due to an increase in income in these regions and the volume of housing construction in comparison with demand.

They have a lot of data in their full research, including the areas with the lowest ROI in recent years. Check out their infographic of the most expensive areas in 1986 versus today, then jump to their full report from the link below.

Rich City, Poor City: How Housing Supply Affects Regional Economic Inequality | Trulia

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