Call it “The Heartland.” Or “America’s Breadbasket.” However you choose to refer to the area between the Rockies and the Appalachians, you can also assign an important new descriptor: Home to America’s hottest housing markets. In the latest market report from Realtor.com, California cities that once dominated the list have been replaced by several Midwestern cities, like Fort Wayne, Indiana; Columbus, Ohio; and Detroit, Michigan.
“Fast-growing Midwest markets are overtaking pricy California cities on property search website realtor.com‘s hottest markets report, which looks at the areas of the country in which properties are selling at the fastest rates (by days on market),” said Inman. “The July list…named seven midwest markets and five in California.”
So what’s responsible for the geographical shift? Blame (or credit) continually rising prices and inventory issues, which is driving homebuyers to less costly markets.
“With the median home list price hovering at a record level, affordable markets are very attractive for buyers, which is contributing to the popularity of many Midwestern markets,” realtor.com chief economist Danielle Hale said in a statement, per Inman. “Although construction is increasing in many regions, inventory remains scarce due to strong buyer demand and years of underbuilding. Even these affordable markets run the risk of what we’ve seen elsewhere if they aren’t able to keep pace with new construction.”
Added Mansion Global: “The shift to the Midwest underscores the severity of the housing shortage in some areas, where developers have built very little besides high-end homes since the Great Recession.”
The Realtor.com list is based on listing views and median days on market. “Properties in the 20 markets chosen moved 17 to 30 days more quickly than homes in the rest of the country,” said Inman. “Homes in these 20 markets spent four days fewer on the market on average than this time a year ago. Listing views were 1.8 times higher than the national average and 16 percent higher than last year.”
The No. 1 market on the list remains West Texas oil town Midland, Texas – the fourth month in a row the city has been at the top. “With rising fortunes in the West Texas oil patch, demand for homes is booming in Midland and houses sell in less than a month on average,” said the Dallas Morning News.
At No. 2 is Fort Wayne, Indiana, followed by Boise City, Idaho; San Francisco-Oakland-Hayward, California; Columbus, Ohio; Colorado Springs, Colorado; Detroit-Warren-Dearborn, Michigan; Racine, Wisconsin; Vallejo-Fairfield, California; and Rochester, New York. Janesville-Beloit, Wisconsin; Boston-Cambridge-Newton, Massachusetts; Pueblo, Colorado; and Grand Rapids-Wyoming, Michigan are also in the top 20.
“Formerly depressed areas of the country, particularly in the Midwest Rust Belt, have watched prices soar over the past year as more homebuyers are entering markets where there’s been very little new home building since the housing bust of 2008-09,” said Mansion Global. “The situation in Boise highlights the severity of America’s affordable housing shortage. A recent study by the U.S. Department of Housing and Urban Development, found there are 10 times more buyers looking for a home in Boise than available homes for sale. Median days on market was down to only 34 days.”