There are a number of ways to define hot housing markets, ranging from price increases to new housing starts. Realtor.com has come up with its own, which is the number of people who search its available listings.
The home listing firm described the methodology used by Realtor.com’s chief economist, Jonathan Smoke, to measure June:
To see where demand for housing is greatest, Smoke and his team reviewed the number of listing views relative to the number of listings in the 300 largest U.S. markets. To see where houses are flying off the market, they looked at the median number of days that homes spent on the market.
Combined, this exclusive analysis — the realtor.com Hotness Index — identifies the 20 medium-size to large U.S. markets where buyers are eagerly seeking homes and sales are closing quickly.
Smoke pointed out that very few states dominated the listings, based on where the cities are located:
California again dominated the hottest markets list, with almost half of the country’s 20 hottest real estate markets. This is because supply is tight and the state’s strong economy is fueling demand. San Francisco captured the No. 1 spot from Denver, while Vallejo and Santa Rosa also made the top five.
Texas is represented four times: Dallas ( No. 5), Midland ( No.17), Austin (No. 18), and San Antonio (No. 19). Colorado sees Denver (No. 3) remain in the top three. Michigan is again represented twice, with Ann Arbor (No. 7) and Detroit (No. 9) both climbing in the rankings.
Texas and Colorado’s markets have remained resilient despite the declines in oil because of their diversified economies. Michigan, on the other hand, performs well because of the combination of economic recovery and very strong affordability.
There was a time during the recession when unemployment in Michigan was so high, it may not have been possible to give a house away. And, notably, Sacramento (No. 11) and Stockton (No. 16) are in California’s central valley where housing prices in many cases were also decimated by the explosion of the real estate bubble.
The entire list of the top 20 markets, according to Realtor.com:
- 1. San Francisco, Calif.
- Vallejo, Calif.
- Denver, Colo.
- Santa Rosa, Calif.
- Dallas, Texas
- San Jose, Calif.
- Ann Arbor, Mich.
- Boston, Mass.
- Detroit, Mich.
- Santa Cruz, Calif.
- Sacramento, Calif.
- San Diego, Calif.
- Fargo, N.D.
- Billings, Mont.
- Columbus, Ohio
- Stockton, Calif.
- Midland, Texas
- Austin, Texas
- San Antonio, Texas
- Fort Wayne, Ind.