The COVID-19 pandemic sent millions of Americans scrambling for the open spaces and cleaner air of suburbia, sending what was already a hot housing market to a boiling point.
Demand for homes was already high before the pandemic in many coveted parts of the country, but the global health crisis interrupted supply chains for building materials and locked down construction activity, making the situation worse for prospective home buyers. Houses in these markets sell in less than 20 days.
There are signs the stratospheric home prices may be beginning to level off. Housing starts (groundbreaking on new residential homes) growth was strong this summer, while homebuilding permits dropped to an eight-month low in June, an indicator that developers sense demand for new homes is cooling. Both indicators have returned to pre-pandemic levels, according to Reuters.
However, one reason for this could be that prices are still so high that potential homebuyers have simply given up for now. Those who have relocated across state lines in 2020 have tended to move Western states — especially to Oregon, Idaho, and Wyoming — and to Southern states, such as the Carolinas, Tennessee, and Florida, according to an annual survey by moving company United Van Lines. These are the cities where home values are rising the fastest.
To identify the 50 most expensive housing markets in the South, 24/7 Wall St. reviewed data from the U.S. Census Bureau’s 2019 American Community Survey five-year estimates, ranking only the 2,352 census-designated places, cities, and towns with at least 5,000 residents in the South. We also calculated the percent of population change using ACS data.
By far, the most represented state is Virginia, with 20 of the 50 most expensive housing markets in the South, although no Virginia markets are in the top three. Florida and Maryland are also well represented with 13 markets each. Texas has five markets, and Alabama, Georgia, Tennessee, and North Carolina have one each.
The median home prices in the most expensive markets in the South range between $627,000 and $1.5 million, while median annual household incomes range between $82,000 and $250,000.