What Real Estate Slump? Here Are the Cities Where the Housing Market’s Heating Up
By Andrea Riquier
Apr 13, 2023
While high mortgage rates might have plunged most of America’s housing market into a deep slump, the saying “all real estate is local” still applies—and certain cities are defying the odds and bucking this nationwide decline big-time.
As proof, look no further than the latest rankings of the Realtor.com® Hottest Markets List, which takes the temperature of local markets across the country by comparing two variables: demand (measured by the number of views per listing) and pace (measured by how long listings linger for sale before getting snapped up).
For the month of March, Rochester, NY, was deemed to be the hottest market of all for the second month in a row.
Located near Lake Ontario, this unassuming city boasted listings that received 2.6 times more views than usual, and spent a mere 26 days on the market before buyers pounced. In other words, homes here are still flying off the market.
Hot on Rochester’s heels at No. 2 is Manchester, NH, an hour north of Boston, where homes received 3.1 times more views per listing and spent a mere 31 days on the market. In third place is Hartford, CT, where listings received 3.8 times more views and lingered just 36 days. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
‘Regardless of rising interest rates, buyer demand is high’
Given the sluggish state of America’s real estate as a whole, these bustling real estate markets beg the question: What do they have that other cities don’t? One clear draw is affordable prices.
In Rochester, for instance, homes are listed for a median of $257,000—40% below what you’ll face nationwide at $424,000. With low prices like these, high interest rates are simply less of an issue, which means homebuyers can shop freely rather than worry about pinching every penny.
“It’s definitely still a seller’s market,” says real estate agent Danielle Riley, president of Rochester’s Better Homes and Gardens Real Estate Prosperity. “Regardless of rising interest rates, buyer demand is high.”
“Overall, 16 of March’s hottest markets had median listing prices below the national median,” adds Hannah Jones, economic data analyst at Realtor.com. “The average listing price of the top 20 markets was $384,000 in March, 9.6% lower than the national median.”
But what makes certain markets hot isn’t just that they’re bargains; they also offer a lot for the money.
So while New York City might bleed residents dry, those who venture to Rochester will pay much less to enjoy what’s billed as the “cultural capital of upstate” New York and the country’s 17th most “arts-vibrant” area. It’s also a water lover’s paradise, dappled with lakes big and small as well as the nation’s largest waterfall nearby.
“Being close to Niagara Falls is awesome,” Riley says. “We’re a five-minute drive to Lake Ontario. I love that I can drive to any of the Finger Lakes within one to two hours. Anyone who ever comes to visit, they fall in love with Rochester immediately.”
Will America’s hottest markets remain affordable?
But will prices in these hottest markets stay affordable? In Rochester, listing prices are up 17.1% compared with last year. That’s nearly triple how fast home prices are rising nationally (6.3%).
Still, Jones points out that home price growth in many of March’s hottest markets is still slow and steady—a far cry from the meteoric rise and fall of prices seen in pandemic-era hot spots like Austin, TX.
“A lot of [today’s hottest] markets have been steady over the past few years, while we’ve seen the boom and bust of a lot of Sun Belt markets and vacation areas,” Jones says. “These markets were riding with the national trends, but because they never had an explosion in price growth, they stayed relatively affordable, especially relative to the incomes of people who live there.”
Why affordability is local, too
Not all hot markets are highly affordable, though. One clear case is Manchester, where listing prices are higher than the national median at $550,000. This might be high, but it’s still substantially lower than the nearby Boston metro where homes sell for a median of $824,000. So, in relative terms at least, Manchester is still a bargain.
Home prices aside, another factor causing homebuyers to flock to certain markets is economic stability, as illustrated by March’s fourth hottest market: Columbus, OH.
Although home prices here are modest at $375,000, local real estate agent Andrew Show of Buyer’s Resource Realty Service points to the “energy” in the area that comes from having several world-class universities, state government offices, and headquarters for L Brands, Nationwide Insurance, and more.
As a result of all this, Show says, “We’re not experiencing any downturn.”
As Jones sums up, the hottest markets in March “are good areas with strong local economies, and access to everything that you need locally. You can have a lot more for a lot less in these areas.”