Real estate in the U.S. finally seems to be cooling off. After rising nearly 30% from the bottom, the growth in home values finally appears to have slowed.
However, this is not the case everywhere.
There are some places where home values are still projected to increase; meaning that now may be an excellent time to buy while homes are still relatively cheap. Here are the five markets expected to gain the most in value over the next year, according to Zillow.
Michigan (Projected 1-Year Gain: 6.9%)
Michigan may seem like an unlikely candidate for this list, with the financial problems in places like Detroit, but home values have risen by about 8.5% over the past year and are projected to nearly match it this year.
More than 23% of Michigan homeowners have negative equity in their homes, but this number should shrink considerably if property values rise as expected. And even though homeowners may be underwater, they have been very responsible about their bills, as Michigan's 3.8% mortgage delinquency rate is among the lowest in the nation.
Georgia (Projected 1-Year Gain: 7.8%)
The housing market of Georgia ranks 3.5 out of 10 on Zillow's "market health index" due to one of the highest inventories of foreclosed homes and the fact that 30% of its homeowners are underwater on their mortgages. However, houses are selling relatively quickly and values have risen nicely.
Nevada (Projected 1-Year Gain: 7.9%)
Nevada has one of the least healthy markets in the U.S., with more than 32% of homeowners underwater and a very high 11% mortgage delinquency rate.
Still, Nevada's home values have shot up for one basic reason – they were among the hardest-hit by the mortgage meltdown and the ensuing bargains have attracted tons of buyers.
Even after gaining more than 21% in value over the last year alone, the average home price is still more than 40% below its 2006 peak in many parts of Nevada. Simply put, you can buy a lot of house for the money, and as more buyers come back to the market in Nevada, the stronger the rebound will be.
West Virginia (Projected 1-Year Gain: 7.9%)
Interestingly, West Virginia is the only state in the U.S. that is rated a perfect 10 out of 10 by Zillow in terms of overall market health. This takes into account such factors as home value trends, inventory of foreclosures on the market, and mortgage delinquency rates.
Well, West Virginia's home values have risen more than 15% in the past year, the percentage of the market made up of foreclosures is the second lowest in the nation, and only 3.1% of homeowners with a mortgage are behind on their payments, well below the national average of more than 6%.
California (Projected 1-Year Gain: 9%)
Real estate seems to be firing on all cylinders in California right now. In fact, out of the 100 largest metropolitan areas in the U.S., five of the top six "healthiest" markets are in California.
Despite being one of the most expensive markets in the country (only Hawaii and Washington D.C. are pricier, on average), homes are flying off the market in California. The average house only sits on the market for just over two months, and more than 85% of homeowners make money on the sale of their homes, one of the best rates in the U.S.