Yahoo Finance 3 Housing Markets That Will Rise in Value Before the End of 2024
The housing market remains difficult for many Americans, both the buyers and the sellers. Inflation soaring rates, low inventory and home prices that continue to rise all are making the dream of homeownership hard to reach.
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Regarding home prices, they have continued to climb across the country in the past few months — a trend that is showing no signs of slowing down.
The median home price increased to $419,300 in May, a 5.8% price jump in the past year and “the highest price ever recorded and the eleventh consecutive month of year-over-year price gains,” according to the National Association of Realtors’ (NAR) Existing Home Sales Report released on June 21.
Mortgage rates have been hovering around 7%, with the 30-year average mortgage ticking down slightly to 6.87% as of June 20, according to Freddie Mac.
The combination of high home prices and elevated mortgage rates has proved to be challenging for the housing market, weighing down sales activity, said Realtor.com chief economist Danielle Hale, commenting on NAR’s report. Further, with the Fed reducing the number of rate cuts it will undertake this year, Haled noted that “it may be too little too late for some would-be first time home buyers who have likely chosen to take advantage of easing rents, a factor behind the slipping homeownership rates for younger households.”
Against this backdrop, which housing markets are rising?
“By the end of 2024 and for the next few years, what constitutes a “hot market” will be affordability,” said Dottie Herman, vice chair and former CEO for Douglas Elliman Real Estate. “That is the leading driver for individuals and families to move. Affordability equals demand and small to medium-sized cities and markets are attracting millennials, the largest group of Americans who are buying homes.”
Herman added that cities and surrounding communities in the south and southwest are seeing a large influx of residents from other states where it has become too expensive.
“Even cities in the Midwest, the rustbelt, which have been almost forgotten due to loss of manufacturing jobs, have seen property values going up.,” she said. “If jobs come back, workers move in and a local economy comes back with it. Then prices go up.”
Realtor.com’s Hale agreed with the premise that housing markets that offer home shoppers affordability are the ones poised to continue to see prices rise in 2024.
According to her — using the May Realtor.com Hottest Markets report and data — three metros are poised for price growth.
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1. Raleigh-Cary, North Carolina
The market rose 89 spots in the rankings to number 127 as supply tightened and page views beat the U.S. average, said Hale.
“Raleigh is the most expensive among these markets with a median list price of $462,000,” she said, adding that the price per square foot was up 4.4%.
In turn, Hale noted that shoppers in Raleigh-Cary will see an increase in homes coming up for sale (+14.6%) and an increase in the overall number of homes for sale (+28%), but homes continue to sell quickly.
“Time on market was just 32 days in May, down 12 days from one year ago and 13 days faster than in the U.S. overall,” she added.
Other experts echoed the sentiment, including Kevin Leibowitz, president and CEO, Grayton Mortgage, who said that North Carolina seems to have “the most momentum.”
“We do a fair amount in the Raleigh area, and that market has been strong since we entered it in 2018,” he said. “The price point — generically — is less than our more expensive markets – such as California and New York- and that makes it more interesting to a greater number of buyers.”
2. Philadelphia, Pennsylvania
This market rose 86 spots in the rankings to number 101 of 300, with constrained supply and demand that outpaces the U.S. average being key drivers.
In addition, Hale said that Philadelphia has an affordable median home price, especially for a major coastal market — at $382,000 — the least expensive among these markets.
“This has helped keep the Philadelphia market attractive, and the median listing price was up 9.3% compared to a year ago, while the typical price per square foot rose similarly, 8.3%,” she said.
In turn, buyers in Philadelphia will see more homes that are just listed (+8.5%) and an increase in the overall number of homes for sale (+8.4), but homes continue to sell quickly, she added.
3. Chicago, Illinois/ Naperville, Indiana/ Elgin, Wisconsin
This market rose 67 spots in the rankings to number 63 of 300, making it the top ranked among these three, said Hale.
“An affordable median home price of $400,000 helps the Chicago area to stand out,” she said. The median listing price was up 6.3% compared to a year ago, while the typical price per square foot rose similarly, 6.9%.”
For buyers in Chicago, there are not as many just listed homes (-3.9%) compared to a year ago, but the overall number of homes for sale has still moved slightly higher (+4%) even as homes continue to sell quickly, she said.
“Chicago was the fastest moving market among these three, with time on market of just 25 days in May, down 9 days from one year ago and 19 days faster than in the U.S. overall,” added Hale.
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