Which State Has the Strongest Housing Market?

Which State Has the Strongest Housing Market?

As the real estate market continues to recover, one state in particular is making a snappy comeback.

During the recession, California metro areas experienced some of the worst of the housing bubble burst. And as recently as 2012, three out of five of the worst housing markets in the country were located in the state.


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Now, surprising new data from real estate website Zillow finds that California is now home to 5 out of 10 of America's healthiest markets. In the report, northern California city San Jose snagged the top spot, with San Francisco, Los Angeles, and San Diego just behind it. Sacramento held the 10th spot.

(Cities not in the Golden State that are also performing well include Denver, Boston, Pittsburgh, Portland, Ore., and New York City, which filled slots five through nine on the list.)

The rapid home value appreciation in the western state is now helping to boost the financial health of local homeowners on the whole—and having a positive impact on unhealthy housing factors like foreclosure rates and negative equity.

But there's a catch: "That same rapid appreciation may cause affordability issues in the future in these markets, leading to potentially unhealthy conditions," Stan Humphries, Zillow chief economist, told NBC News. And some speculate that the state could even now be home to a growing real estate bubble.

RELATED: What's Hot and What's Not: A Look at America's Real Estate Markets

If you're worried about the shape of the real estate market today—or just want to make sure you can buy a home that you can actually afford—check out our guide to the housing market, and make sure you're schooled in mortgages 101.


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