Contrary to popular belief, real estate barely outpaces inflation over time. On the other hand, it’s hard to make generalizations like this because some areas have seen huge returns in housing. Trulia looked at 100 metro areas to find the places with the highest and lowest home appreciation values.


They examined annual home prices from the past 30 years—between 1986 and 2016—using information from the Federal Housing Finance Agency’s House Price Index as well as their own calculations.

Unsurprisingly, they found that San Francisco has seen that highest increase in value. In 1986, the median home value in the San Francisco metro area was $160,955. Around that time, that amount was similar to values in Cambridge, Massachusetts and Fairfield County, Connecticut. But in 2016, the median home value in San Francisco is $1,058,474, which is a 557% change. That’s an average annual return of about 6.5 percent.


By contrast, Rochester, New York has seen the smallest return on home value. In 1986, median home value was $68,594, and in 2016, it’s just $126,875. That’s an 85% change—an average annual return of about two percent.

Including San Francisco, here are the 10 metro areas with the highest home growth since 1986, according to Trulia.

Metro Area Median Home Value 1986 Median Home Value 2016 Percent Change San Francisco $160,955 $1,058,474 557.6% San Jose, CA $154,787 $923,315 496.5% Honolulu, HI

$120,199 $607,003 405.0% Seattle, WA $81,774 $412,286 404.2% Portland, OR $63,154 $313,079 395.7% Oakland, CA $130,659 $631,109 383.0% Orange County, CA $143,210 $643,483 349.3% Los Angeles, CA $116,061 $520,060 348.1% San Diego, CA $114,414 $502,015 338.8% Miami, FL $62,385 $249,326 299.7%



Trulia looked at economic factors to figure out why these areas saw the highest growth. They estimate that it’s due to income growth in those areas and the amount of housing construction relative to demand.


They have a lot of data in their full study, including the areas with the smallest return on home value over the years. Check out their infographic on the most expensive areas in 1986 vs. today, then head to their full report at the link below.

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