Five Markets Desired By Homebuyers

Article originally posted on Globe St. on April 3, 2024

Could it be that return-to-office policies are once again drawing homebuyers to house hunt close to the locations where they work, instead of the remote settings they were drawn to post-pandemic?

That is certainly the conclusion reached by Realtor.com in its February Hottest Housing Market report. “Large metros continue to heat up as homebuyers return to office and look for a home near business hubs,” the report concluded. “These areas pulled in about 11% more views per listing than was typical in the U.S. in February, and homes spent 15% fewer days on the market than the U.S. median.”

This trend especially favored metros in the West, home to four of the five markets that rose the most in desirability or “hotness.” They were Las Vegas-Henderson-Paradise, NV, Phoenix-Mesa-Scottsdale, AZ, Riverside-San Bernadino-Ontario, CA and Los Angeles-Long Beach, Anaheim, CA. The fifth market was St. Louis, Mo.

Realtor.com ranks a market’s hotness based on market demand, measured by unique views per property, and market pace, measured by the number of days a listing remains active. Annual home prices grew 3.8% in the nation’s hottest markets in February, compared to just 0.3% for the country as a whole.

Prices, however, rose more slowly than they had since August 2021, “suggesting that easing price growth is affecting even the most in-demand markets.”

On the other hand, typical homes for sale in these markets were slightly smaller than a year ago. As a result, the median price per square foot rose 5.5% annually in February. Once again New Hampshire’s Manchester-Nashua region was the nation’s hottest – a status it has been close to since March 2021. However, prices fell in four other “hot” markets, though they remained in the top 20: Oshkosh-Neenah, WI, Dayton-Kettering, OH, Lancaster, PA, and Bridgeport-Stamford, CT. In the first three, prices per SF rose, hinting that more smaller, lower priced homes are on offer. However, in Bridgeport-Stamford there was a 6.9% drop in price per SF.

Three markets dropped from the top 20 list: Norwich-New London, CT, Rockford, IL, and New Haven, CT. However, they remained within range, “emphasizing the recent popularity of Midwest and Northeast metros, which have dominated the list since February 2022.” In contrast, many metros in Southern states fell more steeply, hurt by climbing prices and mortgage rates. Three in Florida were worst affected: Punta Gorda, North Port-Sarasota-Bradenton, and Cape Coral-Fort Myers.

“More affordable markets in the Midwest and Northeast grew in popularity as once-frenzied Southern markets cooled off,” the report stated. “Falling demand has allowed inventory levels to recover and price growth to simmer in these markets, which suggests that more market balance is ahead.”