The American residential real estate market has posted home price increases at or near record paces over the past two years. The list of reasons for this is relatively long.
One primary reason people have bought new homes has been historically low interest rates. Those have begun to disappear. A year ago, a 30-year fixed mortgage often carried an interest rate below 3%.
People have looked for, and found, cities with prices lower than the extremely expensive coastal cities such as New York and San Francisco. Home prices in these metros can be three times the national average. The cities also have high overall costs of living. Many of their former residents moved to such inland cities as Boise, Nashville and Phoenix. Ironically, this rush has caused prices in these smaller cities to soar, so much that long-time residents can no longer afford homes.
Yet another reason people have moved by the tens of thousands is the “work from home” opportunities created by the COVID-19 pandemic. Most offices shut in early 2020 as the virus spread rapidly before vaccines were available. Many of these people will not be asked to return to offices.
In Realtor.com’s recently published The Hottest U.S. Real Estate Markets Just Hit a New Record-High Price — Prepare to Be Shocked, the median list price of what it labeled its 20 hottest markets in February was $562,500. This compares to a national figure of $392,000.
The yardstick for the list was “measured by unique views per listing and how many days the listing remains active on Realtor.com before being snapped up.” A shortage of homes was partially blamed for high and rising prices. George Ratiu, senior economist at Realtor.com commented: “The shortage of inventory has led to a fast pace of sales, with buyers snapping up properties as soon as they hit the market.” Cold winter weather drove up prices in some cities located in warmer parts of the country.
The hottest market, however, was not in a warm part of the country at all. In February, it was Manchester, New Hampshire, where the median price for a home on the market was $439,900. Realtor.com reported one reason for Manchester’s hot real estate is that home prices were “affordable.”
Home prices were not affordable in the second hottest market. The median listing price for a home in Santa Cruz was $1,243,250.
These are America’s 20 hottest real estate markets and their median listing prices:
- Manchester, N.H. ($439,900)
- Santa Cruz, Calif. ($1,243,250)
- Raleigh, N.C. ($430,000)
- Springfield, Mass. ($317,250)
- Topeka, Kan. ($184,950)
- Rochester, N.Y. ($225,000)
- Boulder, Colo. ($851,742)
- Portland, Maine ($522,000)
- Salinas, Calif. ($909,000)
- Vallejo, Calif. ($593,500)
- Burlington, N.C. ($314,253)
- North Port, Fla. ($547,500)
- Fort Wayne, Ind. ($289,900)
- Columbia, Mo. ($337,500)
- Fort Collins, Colo. ($620,000)
- Concord, N.H. ($464,900)
- Columbus, Ohio ($324,950)
- Santa Maria, Calif. ($1,625,000)
- Billings, Mont. ($567,450)
- Worcester, Mass. ($424,000)
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