Slowdown? What Slowdown? Here Are the 10 Cities Where Home Prices Are Still Soaring
Slowdown? What Slowdown? Here Are the 10 Cities Where Home Prices Are Still Soaring
Navigating the U.S. housing market in summer 2022 is seeming a bit like a high-stakes game of Perception vs. Reality.
Perception: After two years of wildfire growth, the real estate business—buffeted by inflation and higher mortgage rates— is coming to a screeching halt. Reality: There are still way more people looking for homes than there are homes themselves. Perception: After unprecedented shortages of homes to buy, new listings are now flooding the market. Reality: Inventory levels, while improving, are still at historic lows. Perception: Finally, home prices have stopped going up—and are maybe coming down! Reality: Price growth is slowing down—but certainly not everywhere.
Just as sellers are slowly learning to downshift expectations and buyers are collectively hoping for a break, there are still places across the country seeing huge year-over-year increases in median home list prices—some well over 30%.
Realtor.com set out to find the cities that are defying price expectations with prices continuing to go up and up.
“There are several indicators that the national housing market is rebalancing in a more buyer-friendly direction,” says Realtor.com Chief Economist Danielle Hale. But “in these top 10 markets with the biggest price growth, we’re generally seeing signs that the rebalancing seen elsewhere has not progressed as far.”
To find the places with the greatest protracted price increases, the Realtor.com data team analyzed the 100 largest metropolitan areas and calculated which ones in July saw the highest percentage of home listings with price increases on Realtor.com. The data team looked at all active listings (not including sales) for single-family and multifamily homes in July 2022 versus July 2021. To achieve geographic diversity, we included only one metro per state. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
Besides rising prices, the most common aspect among these 10 cities is affordability, says Hale.
“Eight of these 10 markets have median home list price well below the U.S. average,” she says. “The two exceptions, Miami and Honolulu, are warm-weather spots benefiting from ongoing remote work trends and the resumption of domestic and global travel.”
Let’s take a look at the top 10 cities where sellers are still ruling the roost—for now, anyway.
1. Miami, FL
Median home list price in July: $$625,000
Percentage list price increase, year over year: 36.2%
Florida saw some of the strongest home price appreciation and rent increases in the country due to an influx of demand from out-of-state buyers spurred by the COVID-19 pandemic, says Brad O’Connor, chief economist for the Florida Association of Realtors.
“With work-from-home policies becoming more entrenched and Florida’s relative affordability to wealthy markets in California and the Northeast, the demand for homes by out-of-state buyers will remain higher than before the pandemic for some time to come,” O’Connor says.
This demand is also contributing to Miami having the highest percentage of year-over-year growth in rent, at 37.4%.
The high increase in median home prices is also likely in part due to the disproportionately large luxury homes on the market in South Florida, compared with the other metro areas, O’Connor says.
“You’ll find a greater share of these high-end properties than you did last year, and that’s having the effect of pulling up the median list price,” he says.
Lesley Deutch, a real estate consultant for John Burns Real Estate Consulting in Boca Raton, FL, points to the lack of developable land in the Miami metro as also contributing to the high demand for existing homes.
While buyers can still find homes for sale that are less than the national median list price, for the true Miami experience, there is this three-bed, three-bath penthouse condo with a spectacular view of Biscayne Bay, listed for $1.3 million and located in downtown Miami.
2. Memphis, TN
Median home list price: $318,000
Percentage list price increase, year over year: 32.7%
The Memphis real estate market is hot. How hot is it?
Last year, Realtor.com noted that an inordinate amount of first-time homebuyers is battling investors for the best homes on the market. Thanks in part to these investors driving up home prices, the median list price in Memphis has seen a huge jump year over year.
“The limited selection, low rates, and entry of numerous cash buyers have prompted sellers to try to take advantage of the market, fueling higher prices,” says Kelly Erb, a real estate agent with Marx Bensdorf Realtors in Memphis.
“Historically, Memphis has been an undervalued market and, combined with no state income tax, has created many people moving here,” adds Erb.
Add the city’s location along the Mississippi River, the Blues Hall of Fame, and some arguably amazing barbecue, and it’s no surprise people are flocking to Memphis.
On average, homes in Memphis are spending 31 days on the market, which is five fewer days from last year.
For $735,000, buyers can grab this stunning Victorian with four bedrooms and 3.5 baths located about a block from the river.
3. Omaha, NE
Median home list price: $379,000
Percentage list price increase, year over year: 31.3%
The pandemic forced a lot of people to reevaluate what was important to them and what kind of life they wanted to live. Plenty chose to leave cramped city apartments for wide-open spaces, like in Omaha.
It’s this change that spurred Nebraska’s newest tourism campaign, “The Good Life Is Calling,” which highlights the state’s welcoming communities, work-life balance, and booming “Silicon Prairie” tech scene.
The median list price of a home in Omaha is $260,000, well below the national average. Most homes are spending about 32 days on the market, which is down from 34 days a year ago.
Buyers looking for some space could consider this three-bed, 1.5-bath, 1,600-square-foot home that sits on a little over a quarter-acre. It’s listed for $265,000.
4. Wichita, KS
Median home list price: $275,000
Percentage list price increase, year over year: 25.2%
Record-low inventory led to bidding wars and quickly rising list prices in this breadbasket city
Last year, a housing frenzy created a stressful experience for both buyers and sellers. Especially buyers.
Things might finally be cooling down, as home sales in South Central Kansas fell by 13.4% in June this year compared with the prior year, according to the Realtors® of South Central Kansas.
The birthplace of both Pizza Hut and White Castle, Wichita is also home to 220 days of sunshine, the largest dinosaur theme park in the country (!), and an air quality index that is 21% better than the national average.
It also happens to have one of the lowest amounts of traffic congestion in the country, with an average one-way travel time of 19 minutes (a quarter of the national average).
For $209,999, buyers can snag this three-bed, 2.5-bath, 2,800-square-foot brick charmer that sits on a quarter-acre lot on a cul-de-sac.
Median home list price: $319,000
Percentage list price increase, year over year: 25.1%
From April 2020 through July 2021, North Carolina added 112,000 residents, according to the U.S. Census Bureau. It ranks fourth in total population gains in the country.
Affordability is the most frequently cited reason people give for moving to North Carolina. Also making the list: rising property values, overall job growth, and a booming tech hub.
Homebuyers have to act fast if they want to grab one of the affordable homes listed for sale, including this three-bed, two-bath, 2,000-square-foot home on close to an acre of land for $275,000.
6. Honolulu, HI
Median home list price in July: $849,000
Percentage list price increase, year over year: 23.5%
It’s never a surprise to see Hawaii on a hottest markets list.
“Hawaii real estate is a global commodity with a forever finite scarce supply,” says George Krischke, principal broker at Hawaii Living. “Just like Manhattan, except we don’t have a commuter train from New Jersey.”
The inventory of homes and condos in Honolulu County (island of Oahu) has increased slightly since January, he says, but it is still close to record low levels.
The “never-ending desire from individuals from all corners of the world to own a piece of paradise” keeps the Honolulu real estate market largely insulated from the national housing trends, he notes.
“You’re either in paradise or you’re not,” he says. “Hawaii is still a relative bargain compared to San Francisco and San Jose, as Honolulu real estate prices have been comparatively lagging since 2012.”
For high net worth buyers, there is this two-bed, two-bath, 1,600-square-foot condo that features ocean-front views (in a building with one owner per floor)—all yours for a sweet $4,150,000.
Median home list price: $385,000
Percentage list price increase, year over year: 23.2%
There were 895 single-family home sales closed in Kent County (where Grand Rapids is located) in June 2022 with an average of nine days on the market, according to the Greater Regional Alliance of Realtors®.
Grand Rapids, the second-largest city in Michigan, is one of the fastest-growing communities in the state thanks to its affordability and employment growth. Its proximity (roughly 85 miles) to beautiful Lake Michigan and its world-class beaches only adds to its appeal.
In May this year, real estate agents were getting 50 offers on a single home listed for under $400,000, according to local news site Bridge Michigan.
Low inventory remains a factor, although the situation is improving.
According to GRAR, inventory is improving slightly with 13.9% more homes listed in June 2022 than in June 2021.
For $260,000, buyers can get this three-bed, 1.5-bath, 1,300-square-foot home nestled in a charming neighborhood. It comes with a sunroom, a back patio, and a home warranty.
Median home list price: $360,000
Percentage list price increase, year over year: 23.1%
According to the Greater Milwaukee Association of Realtors, the housing market is cooling slightly from the fever pitch of 2021.
Unfortunately, the scarcity of inventory is predicted to continue for the foreseeable future.
“The pressure of high demand on low supply can only be expressed through increasing prices,” notes GMAR.
Milwaukee, the largest city in Wisconsin, is tucked along the western shore of Lake Michigan and is less than a two-hour drive from Chicago.
Homebuyers looking for a house within walking distance to parks, schools, and restaurants should check out this three-bed, 2.5-bath, 2,100-square-foot house listed for $350,000. Built in 1905, the house now features original charm and modern conveniences.
9. Tulsa, OK
Median home list price: $315,000
Percentage list price increase, year over year: 22.8%
The past two years in Tulsa can be summed up best this way: insanity.
“We’ve done some of our best numbers these last two years in sales,” says Tiffany Johnson, a real estate agent with Chinoweth & Cohen Realtors. “People were just blowing comp numbers … out of the water.”
She said houses were going for $15,000 to $20,000 over the asking price with 15 to 20 offers at a time. And most of the buyers were coming from out of state, especially California.
She said the beauty of the area coupled with extremely affordable housing was drawing folks from California, Oregon, Washington, and Florida.
Most homes in Tulsa are staying on the market on average for 33 days, which is five fewer days than last year at this time. However, Johnson notes, inflation and rising mortgage prices are dampening the real estate frenzy.
Buyers can still get a lot for their money in Tulsa, including this 3,468-square-foot house with four bedrooms and three bathrooms asking for $450,000. It comes with a private pond.
10. Harrisburg, PA
Median home list price: $295,000
Percentage list price increase, year over year: 22.3%
Like many Pennsylvania metro areas, Harrisburg is in a remote-work housing boom, with swelling rents and still-rising home prices. Even so, the place is still a bargain compared with nearby Pittsburgh, Philadelphia, New York City, and Washington, DC.
“As prices have climbed higher in other markets, our market tends to look even more attractive for its location and comparatively affordable housing,” says Joy Daniels, a real estate agent with Joy Daniels Real Estate Group in Harrisburg. “Our proximity to those major cities also makes for a more affordable living option when home prices spike in surrounding areas.”
Homes are staying on the market on average of 41 days in Harrisburg, where buyers are starting to see some price-reduced homes pop on the market.
For $214,900 (reduced from $215,900), buyers can get this three-bed, one-bath brick house with hardwood floors, shiplap, and a new kitchen.
As more people discover the “rural yet sophisticated area that gives a small-town feel,” Daniels says, the high demand and low inventory of homes will keep prices strong.
Something big is happening in the U.S. housing market—here’s where 27 leading research firms think it’ll take home prices in 2023
Something big is happening in the U.S. housing market—here’s where 27 leading research firms think it’ll take home prices in 2023 Do you like this Article ? Sign up HERE for your FREE M&M Account to receive more Real Estate related information and news and THIS...
California Buyers Still Can’t Afford Homes
The issue for California residential real estate remains the same. Poor affordability means that despite latent demand, buyers can’t afford the prices of homes in the Golden State. For that reason, many have left to find much cheaper homes in other states. Unemployment will likely be on the rise along with lower business profitability (tech sector continues to lay off workers) which means fewer buyers are likely for 3 to 6 months.
The stronger consumer optimism is running against sticky inflation and a likelihood the FED can’t lower interest rates. But will that discourage buyers in California? Demand is always intense in CA. No other place offers what California has, and buyers today do seem to put lifestyle at the top of their list.
The luxury housing market, like most other real estate sectors, is adjusting to a slowdown. Affordability and home size are every bit as much on wealthy buyers’ minds as other consumers. “The reality is we are coming out of one of the best real estate markets in history,” Gary Gold, a luxury property specialist with Coldwell Banker Realty in Beverly Hills, Calif., notes in the latest Coldwell Banker Global Luxury Trends Report. “But that level of demand and price appreciation wasn’t sustainable.”
Nearly 90% of respondents to the Coldwell Banker survey say they believe the real estate market will be better than or the same as 2022 for property investment. The following emerging trends were noted in the report.