Hot Housing Markets Shifting to More Affordable Communities
Realtor.com’s monthly housing analysis, which tracks demand in the United States, finds that California is slipping in popularity among homebuyers, with one exception: the city of Chico, which was affected by the Camp Fire in 2018. Demand there is seeing the effects of a loss of available properties.
Meanwhile smaller, secondary markets around the country are seeing a surge in interest.
So-called hottest markets receive 1.4 to 2.6 times the number of views per property compared to the national average. In terms of supply, these markets are seeing inventory move 13 to 43 days faster than the rest of the country. The hottest markets have faster-moving inventory—the median time on the market is two days faster for the hottest markets on average from last December. While these markets remain hot, there is evidence of deceleration as the national housing market begins to cool.
Midland, Texas, slipped to number two in December, with Odessa, Texas, outpacing other top contenders for the number three slot. Eleven states were represented in the top 20 list: California, Texas, Ohio, Indiana, Colorado, Massachusetts, Michigan, Idaho, Kentucky, Tennessee, and Illinois. While California markets still outnumbered others, with seven markets making it to the top list, several of its markets have slipped, including San Francisco, San Jose, Vallejo, and Stockton-Lodi.
The realtor.com data was underscored by research from the California Association of Realtors (CAR), which found that lower seasonal home prices allowed more Californians to afford a home purchase in Q4 compared to the previous quarter, but higher interest rates pushed affordability lower compared to the previous year.
According to CAR, compared with California, more than half of the nation’s households (54 percent) could afford to purchase a $257,600 median-priced home, which required a minimum annual income of $55,850 to make monthly payments of $1,400.
New to realtor.com’s top 20 list are Rockford, Ill., and Akron, Ohio, which likely benefit from the rising popularity of neighboring markets (Milwaukee/Chicago and Cleveland, Ohio, respectively), but also provide more affordable homes for those who are willing to commute. The median list price in Rockford is $130,000 compared to $245,000 in Milwaukee. The median list price in Akron is $150,000 compared to $170,000 in Cleveland.
Affordability was a big factor in realtor.com’s most-improved markets overall. Of the largest 40 metros, the most improved metros were Cleveland (+50 spots); Providence, R.I. (+42 spots); Cincinnati (+35 spots); Philadelphia (+32 spots); and Milwaukee (+32 spots). Four of the five most improved markets have a lower median listing price than the national price of $289,000, the exception being Providence, which has a fairly comparable median listing price of $339,000.