housing activity often Raise spring, but this year, housing affordability concerns and recession fears are influencing seasonal trends. While mortgage rates for housing transactions and construction activity have declined significantly Agitation In February, these metrics looked sluggish for March. Many landlords and renters are staying put waiting out a possible recession, while those looking to relocate are looking for more affordable areas.
until January, about 30% All work was done out of people’s homes, six times more than before the pandemic. In busy urban areas, the stake is even higher. Availability of work from home conditions along with skyrocketing prices in busiest metros is prompting people to relocate further away than ever before. They are choosing smaller communities with more affordable home prices and lower costs of living to combat budgetary pressures, while also aiming for desirable locations with fast-growing economies that are not yet too crowded to transplant happened.
quarterly Wall Street Journal/Realtor.com Emerging Housing Market IndexReleased in April, indicates the most popular cities that are attracting a large number of new home buyers. It is based on supply and demand, affordability, average days on market, and several indicators of economic health and quality of life, such as attractive amenities and plenty of well-paying jobs. None of the emerging markets identified by the index are located in the West, the region most notorious for high housing prices. Instead, they are in smaller metros where first-time home buyers can afford local home prices along with local wages.
For example, Lafayette, Indiana, topped the list in March with an average list price of nearly two-thirds of the national average. A major manufacturing center and college town, the city is also close to both Indianapolis and Chicago. Average list prices in 18 of the 20 emerging markets were below the national average—the exception was Manchester, New Hampshire, which is considered one of the hottest housing market in the country right now, and Knoxville, Tennessee, which ranks high on the US news list best place to live, in both manchester And KnoxvilleRents are also increasing rapidly.
Top 20 Emerging Real Estate Markets
These are the top markets that are attracting home buyers in the spring of 2023, according to the Emerging Housing Market Index, along with March 2023 median listing prices, population and unemployment rates.
| Post | market | average listing price | population | unemployment rate |
|---|---|---|---|---|
| 1 | Lafayette, Indiana | $289,000 | 224,709 | 2.8% |
| 2 | Bloomington, Illinois | $339,000 | 170,889 | 3.5% |
| 3 | Elkhart-Goshen, Indiana | $275,000 | 206,921 | 3.2% |
| 4 | Lebanon, Pennsylvania | $372,000 | 143,493 | 3.1% |
| 5 | Fort Wayne, Indiana | $339,000 | 423,038 | 2.7% |
| 6 | Topeka, Kansas | $249,000 | 232,670 | 2.9% |
| 7 | Sioux City, IA-NE-SD | $305,000 | 149,365 | 2.6% |
| 8 | Omaha-Council Bluffs, NE-IA | $345,000 | 971,637 | 2.4% |
| 9 | Springfield, Illinois | $144,000 | 206,898 | 3.9% |
| 10 | Manchester-Nashua, New Hampshire | $550,000 | 424,079 | 2.4% |
| 11 | Janesville-Beloit, Wisconsin | $331,000 | 164,381 | 3.3% |
| 12 | Columbus, Ohio | $375,000 | 2,151,017 | 3.2% |
| 13 | La Crosse-Onalaska, WI-MN | $334,000 | 139,211 | 2.4% |
| 14 | Johnson City, Tennessee | $413,000 | 208,068 | 3.4% |
| 15 | Springfield, Ohio | $172,000 | 125,622 | 3.8% |
| 16 | Hickory-Lenoir-Morganton, North Carolina | $349,000 | 366,441 | 3.3% |
| 17 | Burlington, North Carolina | $368,000 | 173,877 | 3.6% |
| 18 | Columbia, Missouri | $367,000 | 213,123 | 1.9% |
| 19 | Waterloo-Cedar Falls, Iowa | $263,000 | 167,796 | 2.9% |
| 20 | Knoxville, Tennessee | $470,000 | 893,412 | 3.1% |
Final Line for Investors
For investors, this list of emerging markets is one to keep an eye on as the influx of home buyers in an area can push up home prices and rents. Furthermore, most of these cities are still more affordable than the national average home list price, providing newcomers with an opportunity to enter real estate investing, while giving experienced investors the chance to spend more money to buy.
However, the growing popularity of these markets will not protect them from falling prices in the event of a severe downturn. And, as always, it’s important to crunch the numbers on individual deals to make sure you get the type of cash flow you’re looking for. Nevertheless, this list may provide a starting point for your research, especially if you are interested in the Southern and Midwestern regions of the United States.
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
