Home prices have soared in the last year. This has been true in the great majority of America’s cities and suburbs. Some of the increase has been driven by low mortgage rates. The fact that middle and upper-class incomes have stayed steady despite high national unemployment rates early last year is also a factor. And, COVID-19 has caused some Americans to want to leave large metro areas. Whatever the triggers, the carefully followed Case-Shiller shows prices increase in America’s 20 biggest markets so far this year.
Among the places that have had the largest increase in prices are smaller cities fairly close to large metro areas. People can get “more house for the money.” Some people believe smaller cities have less crime and better schools. Realtor.com looked at a number of locations in March and found that the “hottest city” for real estate was Manchester, New Hampshire. Perhaps it was not a coincidence that the next hottest city was nearby Concord, New Hampshire.
Realtor.com made its determination by both the pace at which homes were selling fastest and the number of people who click on homes in these locations. People are also often interested in the same locations as they were in March 2020, when Manchester also ranked in the top spot.
Why Manchester? The theory the researchers offered was:
The largest city in New Hampshire, Manchester (whose metro area includes Nashua) is about 50 miles from Boston, while Concord is just a little farther up Interstate Highway 93, meaning residents of those cities could commute to Beantown in about an hour.
While prices in Manchester are relatively high compared to much of the nation at an average of $420,000, the Boston average was $700,000. A number of other cities near the top of the list were also small, based on population, and had low home prices. Burlington, North Carolina has an average home price of $302,000. The average home price in Springfield, Ohio was $145,000.
One thing the Reator.com study cannot show is what happens to home prices in the next year or two. The last time home prices rose rapidly in the United States was in 2005 and 2006. This was followed by the home price crash of 2007 and 2008 when mortgage defaults rose along with evictions. In the meantime, it is a bonanza for home sellers, and for homebuyers one of the most expensive markets in history.