Unlocking Affordability: Top 20 Emerging Housing Markets This Fall

The autumn season brings exciting news for bargain hunters in the United States. The top 20 emerging housing markets across the country share a common thread, making them a magnet for buyers nationwide. In this article, we’ll dive into what makes these markets stand out and why affordability is the name of the game.

The No. 1 Contender: Topeka, KS

3016 SW Clark Ct, Topeka, KS 66604

When it comes to affordability, Topeka, Kansas, takes the crown this fall. As revealed by the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index, Topeka boasts a median home list price of just $250,000. This, coupled with a low unemployment rate, makes it a prime destination for prospective homebuyers.

Insights from the Experts

Hannah Jones, a senior economic research analyst at Realtor.com, sheds light on the appeal of these emerging markets. In an era marked by high inflation, soaring home prices, and elevated mortgage rates, affordability is a critical consideration for buyers. Finding a home with reasonable monthly payments is paramount, and these markets deliver just that.

What Sets Them Apart

The Emerging Housing Markets Index identifies the top markets for both buyers and investors among the 300 largest metropolitan areas. The analysis takes into account several factors, including housing demand, the number of homes for sale, property taxes, and the median duration of home listings on the market. Additionally, strong local economies, well-paying jobs, quality of life, and desirable amenities all play pivotal roles in the selection process.

The Affordability Factor

With national home prices on the rise and mortgage rates approaching 8%, many buyers find their budgets stretched thin. In September, home prices were a staggering 40% higher than four years earlier, and monthly mortgage payments had surged by 114%. This financial strain has driven buyers to explore more affordable living options.

The Wage-Inflation Dilemma

Hannah Jones emphasizes that wage growth has failed to keep pace with inflation, making low-priced homes a necessity for manageable monthly mortgage payments. The top 20 emerging housing markets either feature low home prices or serve as cost-effective alternatives to nearby, pricier cities. Over half of these markets are located in the Midwest, with Indiana dominating the top five positions.

Rapid Price Increases

While these emerging markets provide affordability, prices are appreciating rapidly. Year over year, prices shot up by an average of 19% in September, compared to the national average of 9.5%. Since the onset of the COVID-19 pandemic, prices have surged by 69%, in contrast to the 47% national increase.

Out-of-Area Interest

Jones suggests that many of these areas did not experience the early pandemic price surges seen in other regions. These affordable markets are now attracting interest from out-of-area buyers. Higher incomes in these areas might contribute to sustaining price growth while keeping homes relatively affordable on a national scale.

Topeka’s Appeal

Topeka stands out with homes priced below $200,000 in the city limits, making it an attractive choice for budget-conscious buyers. Patrick Moore, a local real estate agent at Keller Williams One Legacy Partners, notes that larger, move-in-ready homes in desirable suburbs are also reasonably priced. Buyers from the West Coast and more expensive regions are increasingly recognizing the value of living in Topeka, where job opportunities abound, and traffic remains manageable.

Market Dynamics

Despite its affordability, Topeka’s housing market is highly competitive, a significant shift from pre-pandemic times. The median home price has increased by approximately $100,000 compared to September 2019, while the number of available properties has slowly risen over the past year. However, there are still about 50% fewer properties available than a year prior, indicating a hot seller’s market in the area.

Affordability, but Not Everywhere

While most homes in the top 20 emerging markets are reasonably priced, some defy this trend. A quarter of these markets feature prices exceeding the national median list price of $429,500 recorded in September. Notable examples include Manchester and Concord in New Hampshire, with prices surpassing $500,000. Despite this, homes in these markets remain a more economical choice compared to the nearby metropolis of Boston, where median home prices soar to $849,000. Concord, in particular, garners significant interest from out-of-town home seekers.

Attracting Priced-Out Buyers

Worcester, Massachusetts, another top emerging market, offers homes at a median list price of $490,000—more than $350,000 less than nearby Boston, just an hour’s drive away. The Santa Maria metro, situated three hours north of Los Angeles along the Southern California coast, stands as the list’s outlier. This affluent area, encompassing tony Santa Barbara, entices international buyers who are less concerned about affordability constraints and mortgage rates, often paying in cash or providing larger down payments.

The Top 20 Emerging Real Estate Markets – Fall 2023

Here’s a quick glance at the top 20 emerging real estate markets this fall:

  1. Topeka, KS ($250,000 median home list price)
  2. Elkhart, IN ($280,000)
  3. Oshkosh, WI ($317,000)
  4. Fort Wayne, IN ($312,000)
  5. Lafayette, IN ($293,000)
  6. Racine, WI ($352,000)
  7. Manchester, NH ($535,000)
  8. Concord, NH ($550,000)
  9. Columbus, OH ($380,000)
  10. Johnson City, TN ($425,000)
  11. Kingsport, TN ($325,000)
  12. Jefferson City, MO ($318,000)
  13. Springfield, OH ($200,000)
  14. Santa Maria, CA ($1,895,000)
  15. Dayton, OH ($240,000)
  16. Janesville, WI ($320,000)
  17. Canton, OH ($235,000)
  18. Knoxville, TN ($475,000)
  19. Hartford, CT ($400,000)
  20. Worcester, MA ($490,000)

🌶 Hot Take-aways

In conclusion, these top 20 emerging housing markets deliver affordability without compromising on quality. While some markets might appear pricier than the national average, they still offer a cost-effective alternative to nearby major cities. As the housing landscape continues to evolve, these emerging markets present unique opportunities for buyers seeking both affordability and quality of life. For those on the hunt for a bargain, these markets are where dreams of homeownership can come true.

Check out this article next

How To Protect Your Home Against Natural Disasters

How To Protect Your Home Against Natural Disasters

Natural disasters are the cause of billions of dollars in damages every year. Hurricanes, wildfires, tornadoes, and other severe weather events can destroy your home…

Read Article