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Going into the new year, just about everyone has heard the big news: The real estate market is slowing down. Crazy annual price spikes are waning, more properties are hitting the market, and there are fewer buyers to compete with. Everyone is wondering what that means for 2019. Will all long-frustrated, aspiring homeowners finally be able crack open celebratory bottles of Champagne? Will sellers find profit margins shrinking?
Will financial institutions crumble? Will Earth start hurtling toward the sun?
Well, no. As it turns out, not all markets are slamming into reverse. In fact, there are still housing markets expected to be white-hot in 2019—and realtor.com®‘s economic team found them. These are the 10 top superstar metropolitan areas* where both the number of sales and prices are expected to jump in 2019, bucking the national slowdown trend. And many of these are not the places you’d expect to go gangbusters.
Nationally, we’re predicting the number of overall home sales to decrease by 2%, after years of steady climbs. Meanwhile, prices, which have been steadily zooming up over the past few years, will rise only by a paltry 2.2%—thanks to already meteoric prices in many parts of the country, along with the rising mortgage interest rates and tax changes pricing more buyers out of the market.
So what’s cushioning next year’s overachiever metros from this type of deceleration? They all have extremely strong economies and hordes of new residents moving in, and most are relatively affordable. That makes them attractive to West Coast and some Northeastern denizens fleeing shockingly high home prices, taxes, and costs of living. Retirees are trekking south to warmer—and cheaper—climates. And transplants and career seekers are chasing booming areas with plenty of job growth.
Only two metros graced both the 2018 and 2019 lists. Las Vegas took the top spot last year, but fell to No. 7 in 2019. Meanwhile, Lakeland, FL, climbed from fifth to first place this year.
“The diversity of these top markets suggests that real estate can thrive anywhere there is a strong local economy,” says Danielle Hale, chief economist of realtor.com. “While attracting younger individuals and families who are likely to be first-time buyers can be important, real estate can also thrive in sunny retirement communities.”
To determine the best real estate markets of 2019, we looked at the number of sales of existing homes and their prices, along with the amount of new home construction in the 100 largest markets. We also analyzed the local economies of each area, along with population trends, unemployment rates, median household incomes, and other factors.
So what are the real estate markets that will rule 2019?
Hottest Housing Markets of 2019
Tony Fenzel
1. Lakeland, FLMedian list price: $224,950
Predicted sales growth: 5%
Predicted price growth: 7.4%
Lakeland, FL
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Lakeland’s allure is its location—and not just because it’s a 45-minute drive from Walt Disney World.
Many cost-conscious commuters work in the larger cities of Tampa, a 40-minute drive to the west, and Orlando, an hour northeast, but live in Lakeland. And why not? Home prices are way cheaper than Tampa’s median $261,362 or Orlando’s $299,950.
This influx of commuters is a huge step forward for the city, which was clobbered by the financial crisis. Long known for its breezy citrus groves and grassy pastures, the city faced vacant storefronts and foreclosure signs for years after the crash. But these days, houses have doubled in value and are selling fast, says Jason Brown, a real estate agent at S&D Real Estate Service based in Lakeland
“There’s very little inventory,” he says. “And there are still buyers out there chomping at the bit.”
Central Florida commuters aren’t the only ones rushing to move to Lakeland. Students are moving here to attend area schools such as Southeastern University and Florida Southern College. Plus, retirees and first-time home buyers are coming nonstop, lured by the warm weather, the city’s new housing developments, and very low prices.
“There’s construction all over the place,” Brown says.
Buyers in the Lakeland city limits can score new, three-bedroom, two-bathroom houses starting at around $180,000. Or they can snap up existing condos and townhomes in gated communities for between $110,000 and $200,000.
2. Grand Rapids, MIMedian list price: $278,750
Predicted sales growth: 4%
Predicted price growth: 8.2%
Grand Rapids, MI
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When you think of a bustling job market, Grand Rapids may not be the first place that pops into mind. This old factory town relied on the furniture manufacturing industry as its main employer for years, but since then, the city’s low cost of living and affordable housing have attracted lots of companies looking to relocate or expand. The city’s Medical Mile has become a hot spot for world-class research and education.
And the city’s economy shows signs that it’ll keep on growing, attracting even more new residents. In May, Amazon announced plans to build a 850,000-square-foot fulfillment center in Gaines Township, just 13 miles south of downtown Grand Rapids.
“Our main driver is that we have an extremely diverse employer base,” says Trisha Cornelius, a local real estate agent with Keller Williams. “The job opportunities are endless.”
All those good jobs have brought transferees willing to brave the harsh, snowy winters for nice homes in the burbs with a few bedrooms and large backyards. Deals like this three-bedroom, 1.5-bathroom home for $218,000 sell fast, Cornelius says.
3. El Paso, TXMedian list price: $175,050
Predicted sales growth: 7.9%
Predicted price growth: 2.5%
El Paso, TX
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Sandwiched right on the U.S.-Mexico border, El Paso is known for its small-town feel and authentic Mexican eats. However, it’s the abundance of affordable homes on the market that has people arriving by the busload.
“It’s going to be a hot market” in 2019, predicts Alexander Cordova, a real estate agent with One Realty Group in El Paso. “A lot of people are moving into El Paso right now.”
Many of Cordova’s clients are buyers from Arizona and California attracted to El Paso’s low cost of living. The border town is also helped by its proximity to Fort Bliss, the second-largest military base in the country.
This steady influx of buyers looking for a place to live has caused a construction boom in El Paso, with a bunch of new subdivisions containing up to 150 single-family homes.
“It’s a local town that’s blowing up, but it’s not quite there yet,” Cordova says.
Brand-new, three-bedroom, two-bathroom homes—complete with granite countertops and stainless-steel appliances—in subdivisions can be had for between $150,000 and $165,000.
4. Chattanooga, TNMedian list price: $269,950
Predicted sales growth: 5.2%
Predicted price growth: 4.3%
Chattanooga, TN
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The affordability of Chattanooga, which sits along the Tennessee-Georgia border, has turned this once-quiet river city into a hotbed for home flipping. Investors from Austin, TX, and Seattle are nabbing single-family houses here, fixing them up and listing them. And these renovated properties are selling like crazy, says local real estate agent Brandi Pearl Thompson.
Flipped homes are particularly popular with millennials. Swarms have been flocking to this Southern hub for its burgeoning music scene and easy access to hiking, rock climbing, and mountain biking at Signal Mountain.
Investors are purchasing Craftsman-style homes in neighborhoods north of the city, like Red Bank, for between $130,000 and $170,000, then flipping them for more than $200,000 as eager buyers vie for them.
“Investors did this in Nashville about 10 years ago, and they completely changed the city,” says Thompson. “We’re starting to see the same kind of growth.”
5. Phoenix, AZMedian list price: $329,975
Predicted sales growth: 3.6%
Predicted price growth: 5.6%
Phoenix, AZ
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Retirees and buyers fleeing ultrahigh-priced parts of the country are moving to Phoenix for its reasonably priced cribs and year-round sunshine.
Folks can score a home in the retirement hot spot for a fraction of what they’d pay in Los Angeles, San Francisco, or Seattle.
“We have a ton of California people moving here—all day, every day,” says Kristy Ryan, a real estate agent with Re/Max Fine Properties in Phoenix. Those about to retire can sell their homes in the Golden State, buy a house in Phoenix for a fraction of the sale price, and use the proceeds as a nest egg.
“We sell sun here, and it sells really well,” Ryan says.
6. Bridgeport, CTMedian list price: $749,050
Predicted sales growth: 5%
Predicted price growth: 4%
Bridgeport, CT
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The sky-high price tags in the Bridgeport area are no surprise. This metro includes Fairfield County, a posh suburb just outside of New York City where commuters can snag multimillion-dollar mansions in high-cost communities such as Greenwich and Stamford.
It turns out, there’s a high demand for these mansions. Unlike in other wealthy New York City suburbs like Westchester County, NY, buyers in Fairfield County don’t have to pay a 1% mansion tax on homes over $1 million. And in some of the fanciest towns just outside of the city, even more modest homes come with seven-figure price tags. So buyers looking to save a few bucks often head to Fairfield County, where they can find a large home while avoiding the tax, says Leslie McElwreath, a real estate agent at Sotheby’s International in Greenwich.
But it isn’t just the mansions keeping this market hot. Down the road in the less affluent urban area of Bridgeport, CT, proper, buyers seeking extra space for their families—without putting down an entire college fund for a mortgage—can find bargains like this three-bedroom, 1.5-bathroom home for $244,900. A steal!
7. Las Vegas, NVMedian list price: $320,049
Predicted sales growth: 0.9%
Predicted price growth: 7.9%
Las Vegas, NV
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Ten years ago, Las Vegas was a poster child for the housing crash. Yards in many neighborhoods were lined with foreclosure signs, and construction sites sat abandoned. But things are starting to look up, and it’s not just because the Raiders are coming to town (sorry, Oakland!).
“We were ground zero for the collapse, and we went down the most,” says Bryan Kyle, a real estate agent and property manager at First Serve Realty in Las Vegas. “And now we’re rising up [as one of] the fastest.”
Folks from high-cost markets are settling down in Sin City, attracted by the low mortgage rates, lower cost of living, and affordable housing. Did we mention the state’s lack of an income tax? The metro has also seen an influx of younger buyers relocating for tech jobs with companies such as Zappos.com.
Prospective residents are bound to face stiff competition, as homes in good neighborhoods priced under $350,000 are flying off the market, according to Kyle.
“They’re getting sold in a matter of days and getting multiple offers,” he says.
8. Boise City, IDMedian list price: $330,045
Predicted sales growth: 1.5%
Predicted price growth: 6.9%
Boise City, ID
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Much of the boom in Boise’s housing market is due to all of the out-of-staters swooping in. Like in many of the other markets on this list, folks from high-cost states such as California are shuffling across state lines to save their hard-earned cash. (The median price in the Golden State is $536,00, while it’s just $326,000 in Idaho, according to realtor.com data.) They’re lured by Boise’s scenic mountain views plus perks like rafting on the Boise River and the Idaho Shakespeare Festival each summer.
“We finally are big enough that we have the culture and the amenities of most big cities, yet we don’t have the prices,” says Robert Inman, director of operations for Boise’s Best Real Estate Team, a Keller Williams affiliate.
The hordes of new residents, ranging from millennials to retirees, have led to a home construction surge, and buyers are snapping up brand-new homes in sprawling suburbs for $250,000 to $350,000, he says.
Homes built in the early 1900s in Boise’s North End neighborhood are also selling fast. Many buyers are snapping up these three-bedroom, one-bathroom wooden abodes for $400,000 and fixing them up to be worth upward of $1 million, Inman says.
The downside? This influx of buyers has driven up home prices 13.4% since last year.
“It’s gotten harder for locals to buy homes,” Inman says
9. Miami, FLMedian list price: $385,050
Predicted sales growth: 3.3%
Predicted price growth: 5%
Miami, FL
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Retirees are swarming Miami like seagulls prowling for beach snacks. Its 6,000-square-mile metro, stretching from northernmost West Palm Beach to the Florida Keys, sees lots of folks looking to trade high taxes and freezing temperatures for zero income tax and leisurely rounds of golf.
But things weren’t always so sunny. Like many other metros on the list, Miami was hit hard by the past decade’s housing crash. The city saw plenty of foreclosures as well as little to no new home construction from 2009 until 2012.
A new influx of snowbirds migrating south has helped the Magic City get back on its feet.
“While the rest of the country is beginning to see a slowdown, that influx of buyers continually streaming in has protected the region a bit and may help to keep it strong,” says Lesley Deutch, a principal who covers Florida for John Burns Real Estate Consulting.
While international buyers aren’t as plentiful as they once were, they’re still driving some of the demand.
Developers are once again starting to build moderately priced bungalows and townhomes. Farther north in West Palm Beach and Fort Lauderdale, those who dream of owning a home can find new constructions like this four-bedroom, 2.5-bathroom home for $375,000.
10. Boston, MAMedian list price: $500,675
Predicted sales growth: 3.6%
Predicted price growth: 4.6%
Boston, MA
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Over the past few years, more millennials have been flocking to Beantown, attracted not just to the standby industries like education and health care, but also big growth in the tech sector.
“The industries we attract are really stable,” says Loren Larson, a Boston-based real estate agent with Compass. “They’re just not whims of the market.”
But while droves of dewy-eyed dreamers are moving in to jump-start their careers, there’s almost nowhere in Boston proper for them to go. The city limits construction in several of its downtown historic districts, so the limited supply of homes for sale keeps this market hot and the prices up, Larson says.
Two-story Colonial homes in Boston’s city limits are grabbed in days, and they’ll set buyers back about $700,000 to $1 million. Instead, many young professionals head to the burbs. In popular suburbs such as Jamaica Plain and Roslindale, cookie-cutter, two- or three-bedroom homes run around $400,000.
* A metropolitan statistical area is a designation that includes the urban core of a city and surrounding smaller towns and cities.
Clare Trapasso and Cicely Wedgeworth contributed to this report.
The post The 10 Surprising Housing Markets Poised to Rule in 2019 appeared first on Real Estate News & Insights | realtor.com®.
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