- Stockton, a city in California’s Central Valley, filed for bankruptcy in 2012 and was named one of America’s “most miserable cities” by Forbes.
- In the last five years, home prices there have nearly doubled.
- Prices are surging thanks to an influx of Silicon Valley tech workers who can’t afford to live in the Bay Area.
If the city of Stockton, California, is any indication, misery really does love company.
Stockton’s housing market is on fire, despite twice appearing on Forbes’ “most miserable cities” ranking.
In the last five years, home prices in the Central Valley community have increased 92%, reports Mercury News. The median listing price in Stockton – a landlocked city of about 300,000 residents – is $US275,000 right now, according to Zillow. In November 2013, it was $US180,000.
The surge is mostly thanks to an influx of homeowners priced out of neighbouring Silicon Valley in recent years.
“There’s flight away from areas where it’s expensive, to areas where it’s relatively cheap,” Andrew Leventis, deputy chief economist at the Federal Housing Finance Agency, told Mercury News. “It would be just incredibly improbable if that wasn’t driving up prices in the west by some magnitude.”
A real estate agent in the Stockton area told Mercury News that about half of the 18 homes he sold this year went to buyers from the Bay Area willing to take on a longer commute for cheaper housing.
Still, there’s another major reason for the massive price jump. Stockton was one California city hit especially hard by the housing market collapse, so homes there have been able to make up ground and then some.
In 2012, the city filed for bankruptcy and had the nation’s highest foreclosure rate at more than four times the US average, according to RealtyTrac. The foreclosure rate, along with high unemployment rates and violent crime, helped Stockton land a spot on Forbes’ ranking of miserable cities.
While remarkable, the increase in home prices in Stockton isn’t a total outlier. Nationally, home values are rising at twice the rate of a “normal” market as demand outpaces supply across the country, according to Zillow.
Oakland, a city located near San Francisco, experienced the second-largest jump in home prices – nearly 86% – behind Stockton, according to the Federal Housing Finance Agency.
Las Vegas, Sacramento, and Seattle metro areas round out the top five.