According to a recent report from Realtor.com® on America’s 20 hottest markets, these areas saw an annual growth rate of 6.1% in house prices during April, with demand (measured by the number of views per property listing) more than three times the national average.
Economist Hannah Jones explains this phenomenon: "Since mid-2017, we've observed that the relative demand in these markets has been at historic highs, indicating that despite the overall challenging housing market environment, the demand in these regions far exceeds other parts of the country."
Realtor.com's rating also includes market activity, i.e., the average number of days listings stay on the market. Data shows that in April this year, homes in these hot areas sold one day faster than last year and about three weeks faster than the national average.
realtor.com
Even amidst the challenge of high interest rates, some markets still exhibit strong demand. The main driving factor behind this phenomenon is low inventory. While the national inventory of homes for sale has increased, in six of America’s hottest markets, the inventory has decreased compared to last year. Additionally, although unemployment rates have risen in thirteen states, these increases are generally below the national average.
Jones further explains, "The scarcity of inventory drives up the number of views per property, which intensifies competition in the hottest markets and further pushes up house prices."
As businesses gradually return to office work, many homebuyers are beginning to look for residences close to business centers. Jones notes, "The markets in major cities are especially popular. Since April 2023, the national top 40 largest markets have risen an average of 5 ranks."
In April, the hottest area was the Manchester-Nashua region of New Hampshire, ranking number one for the eighth time in the past year. Located less than an hour from Boston and with house prices 34% lower than Boston, these factors indicate that this market’s popularity is unlikely to cool down soon. Other top five markets include Rochester in New York, Springfield in Massachusetts, Concord in New Hampshire, and Oshkosh-Neenah in Wisconsin.
realtor.com
Connecticut also made the list four times due to its convenient transport relative to New York City, including Hartford (8th), New Haven (11th), Bridgeport (13th), and Norwich (19th). Hartford region in Connecticut has the lowest median house price at $406,000, attracting many families seeking larger living spaces, expansive backyards, and proximity to water.
Jacqueline Picarillo from Unique and Luxury Properties in Connecticut notes that the local housing market remains competitive, with closing prices often above the asking price. She also observes that this summer, more millennials are seeking to purchase larger, newer houses. Picarillo adds, "We see many millennials who needed only two to three bedrooms four years ago now buying larger homes."
Picarillo warns homebuyers hoping to purchase in Connecticut's hot markets not to wait until viewing homes to decide, but to act swiftly. She emphasizes, "Buyers should schedule with their agents as soon as they see a property they like that's 'coming soon.' Waiting to see how you feel about a house during a visit is a fatal mistake."
