Midwestern metros dominated realtor.com®’s ranking of the hottest real estate markets in America for September, with Fort Wayne, IN, holding on to the top spot for the third month in a row. But homes are taking longer to sell in the country’s biggest and most expensive metros.
Affordability continued to be a common theme among the top 20 metros, after years of skyrocketing prices. Most of them (13) have a lower median listing price than the national median; the top five have median list prices that average 32% less than the U.S. overall. The realtor.com ranking reflects the places whose listings get the most views on realtor.com, and where homes sell the fastest—both indications of buyer demand. (Metro areas typically include neighboring smaller cities.)
With price-conscious buyers moving the market, it’s no surprise that the Midwest—peppered with smaller metros boasting reasonably priced homes—claims almost half the markets in the top 20. Seven are in the West, and the South and Northeast have two each.
“Demand for homes remains really high as a result of consumer confidence and a growing population of millennials,” says Javier Vivas, director of economic research at realtor.com. Low mortgage rates help, too.
“Making the purchase decision is easier now than it was before,” he says.
As we’ve noted before, Fort Wayne offers a sweet spot of good options for starter homes in a vibrant but accessible city with a revitalized downtown.
“It’s almost like a hidden gem in today’s market conditions; it’s not too large,” says Vivas. Plus, it’s absorbing spillover buyers from the larger metros that surround it: Indianapolis, Chicago, Cincinnati, Columbus, Cleveland, and Detroit.
Even though homes in the top 20 markets sell faster than elsewhere in the country, 12 of them are seeing homes sit on the market for longer than at the same time last year. The biggest slowdowns are in the metro regions of Stockton, CA (seven more days); Dayton, OH (six more days); and Vallejo, CA (five more days).
But while an increase in days on market indicates a cooldown with less market activity, other Western metros, including San Jose and Sacramento, are seeing a decline in the numbers of homes for sale—and scarcity tends to drive prices up, forcing buyers to move quickly and bid high.
If demand remains strong, as projected, those markets are likely to rise on the hotness list. Indeed, once-dominant San Francisco, which fell off the list in favor of more reasonably priced markets, has edged its way back into the top 20, at No. 19. It’s hard to keep San Francisco down for long.
What buyers should look for
A buyer looking for opportunity might wonder where to look: in one of the nation’s hottest metros (all those buyers can’t be wrong, right?), or one that’s just making its way up the list (like, say, Topeka, KS, which just made its debut), or one where housing inventory is growing, meaning there isn’t as much pressure on prices (Las Vegas, Denver, and Los Angeles are seeing robust inventory growth).
Those are all good options, Vivas says.
“As a general rule, if you’re thinking to see your home grow as an investment, you want a place in a market that has a good long-term economic outlook, because those markets tend to be protected from any slowdowns,” he says.
Here are the other hottest markets in September:
The hot listMetroRank (September 2019)Rank (September 2018)Fort Wayne, IN113Rochester, NY22Pueblo, CO31Columbus, OH45Topeka, KS59Midland, TX648Buffalo, NY723Janesville-Beloit, WI875Kennewick, WA921Sioux City, IA1029Burlington, NC112Akron, OH1210Vallejo-Fairfield, CA1335Stockton-Lodi, CA1416Canton-Massillon, OH1515Spokane, WA1653Sacramento, CA1738 Lafayette, IN1854San Francisco, CA1921Dayton, OH2020
Source: Housing Trends Feed