Home prices are rising in the top 20 hottest markets

Nov. 1, 2024

Home prices are rising in the top 20 hottest markets, with listing prices increasing in 15 of them. While national home prices fell 1% year over year in September, these hot markets saw an average price increase of 3.6% due to high demand and limited inventory, with Rochester and Milwaukee leading the gains. Despite a 34% increase in housing stock nationwide, hot markets saw a more modest 23.8% rise. Homes in these areas sold quickly, averaging 34 days on the market—about three weeks faster than the national average—and received 2.6 times more views than typical listings.

Source: nypost.com

Why the South and West Struggle to Become the Hottest Real Estate Markets

The housing markets in the South and West face unique challenges that prevent them from consistently ranking as the hottest markets in the country. Despite favorable conditions like affordability and land availability, there are key factors holding these regions back.

Higher Demand, Yet Modest Price Growth

Southern and Western markets attract newcomers with lower costs of living and spacious properties, especially popular during the pandemic. However, these regions often have more flexible building regulations, allowing for faster development and more inventory. This reduces the pressure on prices, unlike in regions with strict zoning laws.

Income Levels and Economic Drivers

While many Southern and Western cities are growing, they generally have lower median incomes compared to the Northeast and West Coast. High real estate appreciation often correlates with well-paying jobs in industries like tech and finance, which are concentrated in specific cities.

Population Growth and Affordability

These regions continue to grow, attracting people with affordable housing and warmer climates. However, affordability also means that prices have less room to soar, which dampens the overall "heat" of these markets.

Final Thoughts

The South and West remain appealing destinations for homebuyers, yet their ability to rank as the hottest markets depends on factors like economic growth, industry diversification, and local regulations.