The U.S. housing market as a whole has improved dramatically over the past several years. However, just like everything else in America, different areas have performed very differently. And some markets have rebounded much better than others.
Real estate website Zillow rates the "health" of housing markets on a scale of zero to 10. The rating takes into account several sets of data, including home value increases or decreases and the average number of days homes remain on the market. It also includes statistics about the financial health of homeowners, such as the percentage of homeowners with negative equity and the mortgage delinquency rate.
Out of the 100 largest metropolitan areas in the U.S., these five areas all score higher than 9 out of 10 in terms of market health, and for a variety of different reasons. And all but one is in the same state...
5. Los Angeles, California (9.04/10)
Despite being a very expensive market (the average home is worth almost $540,000), the United States' second-largest metropolitan area is doing very well.
Home values have risen by 15% over the past year, and are projected to gain another 8.8% over the next 12 months. Los Angeles has a very low level of foreclosures on the market, and more than 88% of homeowners make money when they sell.
4. San Francisco, California (9.11/10)
San Francisco is among the healthiest markets for a couple of reasons. For one thing, homes are selling incredibly fast. Despite gaining 14% since this time last year, the average home in San Francisco only sits on the market for an average of 47 days, or less than seven weeks.
Additionally, homeowners in San Francisco are in pretty solid financial shape, and just 10.5% of homeowners with a mortgage have negative equity in their homes. This indicates the post-recession rebound has been very strong in the area.
3. Santa Rosa, California (9.53/10)
Santa Rosa is the largest metropolitan area near California's north coast, and makes up much of Sonoma County in California's wine country.
In a nutshell, Santa Rosa is one of the strongest markets in the country because demand for homes is booming in the area, causing rapidly rising prices. The population is growing rapidly, with the population expected to grow by nearly 17% from 2010 to 2020. Over the past year alone, home values in the Santa Rosa area have increased by more than 21%, and are expected to grow another 11.6% this coming year.
2. San Jose, California (9.69/10)
In addition to being the healthiest market in California, San Jose is also one of the most expensive in the nation, with an average home value of $815,000.
The high home prices make the fact that the average home sells in just over six weeks even more impressive. And, only 6.7% of homeowners have negative equity in their homes, which is one of the lowest rates in America.
Pittsburgh, Pennsylvania (9.72/10)
Despite the longest average time to sell a home on this list (111 days), Pittsburgh takes the title of the "Healthiest Market in America", thanks to having some of the most responsible and financially solid homeowners in the country.
Less than 4% of Pittsburgh homeowners with a mortgage are in any stage of delinquency, by far the lowest rate on this list. And, despite the slowest gains on the list (8.8% last year), Pittsburgh only has an 11.2% "underwater" rate. When you combine this with an extremely low foreclosure rate and a very affordable market (average home value is $123,300), it's not a bad time to be a Pittsburgh homeowner.
Again, this list only includes the 100 largest U.S. metropolitan areas. Zillow has a complete ranking, as well as rankings by state, city, and county on its research page. How does your local market compare?