iStock; realtor.com
A brand-new decade is less than a month away, and we’re already seeing a sea change in how—and more importantly, where—Americans want to live.
It turns out, people are deciding it’s just not worth it to work themselves to death to afford homes in the nation’s biggest cities. That’s so 2017! Instead, they’re heading to places where their paychecks will go further and they can enjoy a more laid-back pace of life. In the realtor.com forecast of top markets to watch in 2020, the top 10 are mostly medium-size metros in the South and inland West.
“The cities that we expect to do best in 2020 are not necessarily big, fancy, coastal cities, but secondary markets where the job market is still pretty good but housing is affordable,” says Danielle Hale, chief economist of realtor.com.
Many of these now-scorching metros bounced back from the recession with stronger, more diverse economies; they boast revitalized, walkable downtowns that are a key draw for the next generation of home buyers. With their high affordability, they’re proving to be top-drawer attractions for first-time home-buying millennials and boomers looking toward retirement alike.
In a year when sales are expected to slow by 1.8% nationwide, these top 10 markets are predicted to see a 2.4% increase. Likewise, home prices are projected to rise just 0.8% nationwide but 3.1% in these top metros. (The ranking is based on an analysis of projected home sales and price data.)
The 2010s are in our rear-view mirror. So buckle up, and let’s take a tour of the hottest markets of 2020!
Tony Frenzel
1. Boise City, ID
Median home price: $295,000
Home price change: +8.1%
Sales change: +0.3%
Combined sales and price growth: +8.4%
benedek/iStock
Idaho’s economy pretty much collapsed during the Great Recession. Now, it has one of the highest rates of job growth in the nation, largely propelled by the Boise metro area. Out-of-staters are pouring into the bucolic city tucked in the mountains—according to realtor.com data for the third quarter of 2019, 62.4% of viewers of listings in the Boise metro area were out of state.
“It is absolute craziness,” says Rob Inman, a real estate agent at Boise’s Best Real Estate. He estimates that about half of his company’s clients are from out of state; a few years ago, it was more like 20% to 30%.
They’re attracted by the jobs, many in the tech sector, and by Boise’s relative affordability. Californians, especially, are all too eager to leave behind the Golden State’s high taxes and home prices. All this has exacerbated a housing shortage, and developers are racing to keep up with demand.
“I don’t think you can stand and do a 360-degree turn in this town without seeing construction,” Inman says.
Buyers who can spend $300,000 to $400,000 are in the best position—”I can find [those buyers] homes all day long,” he says, especially in suburbs like Meridian where that much money will get you a newly built, three- to five-bedroom home with granite countertops and hardwood floors. (Check out this one!) Closer to the newly revitalized downtown, prices go up, although the housing stock is older (this one from 1939 has gotten some nice upgrades).
2. McAllen, TX
Median home price: $152,000
Home price change: +4%
Sales change: +4.4%
Combined sales and price growth: +8.4%
realtor.com
In contrast with Boise, the real estate boom in McAllen, a city on the border with Mexico—and home to a portion of President Donald Trump‘s new border wall—is almost entirely homegrown.
“We have a growing population, and they need houses,” says Rene Galvan, owner of the local brokerage RGV Realty. He grew up in nearby Brownsville, but like many of his peers went away for school and spent years working elsewhere. But today, he says, there are more reasons for young people to stick around. (Brownsville and McAllen are part of the same metro area.)
“Things have changed from the ’80s. This is actually now what I’d call a sustainable market,” he says.
According to a 2019 economic profile by the city’s Chamber of Commerce, McAllen is the retail center of South Texas and Northern Mexico, with the retail sector employing 27% of the city’s workforce. Education and medicine are also big employers in the metro area, which is home to several hospitals and medical centers.
Edinburg, where the University of Texas–Rio Grande Valley is based, is a separate city within the metro that’s becoming increasingly popular. One can easily get into a four-bedroom house for under $200,000, like this one sitting on a 7,488-square-foot lot.
North McAllen sits alongside Edinburg and rates high with young families for its top-rated primary school (Gonzalez Elementary). This three-bedroom home sits within the school’s attendance zone.
3. Tucson, AZ
Median home price: $230,000
Home price change: +3.3%
Sales change: +3.4%
Davel5957/iStock
Tucson is most definitely a seller’s market right now.
“If you look at our overall market, it’s probably tighter in inventory than it has been since 2006,” says John Mijac, a broker with Long Realty Co. in Tucson. “Homes are selling as soon as they make it to market.”
At a time when luxury sales are slowing or stagnant in many places across the U.S., homes priced from $800,000 up to several million dollars are moving faster than they have in years.
The city’s economy has revitalized in recent years, as officials have made it a priority to create a business-friendly climate, Mijac says. Its newfound appeal has attracted companies such as Caterpillar, whose new $50 million headquarters in downtown can accommodate up to 700 employees. Still, Tucson has a ways to go—it was No. 8 on a list of metros with the slowest job growth, at 6%, according to the U.S. Census.
There’s also a significant military influence—the Davis-Monthan Air Force Base boasts that it generates $2.5 billion annually for the local economy. The private, Tucson-based Raytheon Missile Systems, the biggest employer in Southern Arizona, has added 2,000 jobs since 2016.
That economic activity, combined with affordability and weather, is why Tucson gets about half its listing views (45.2%) from out of state. But a hefty amount of home buyers hail from nearby (and more expensive) Phoenix.
Young professionals are drawn to downtown, where a streetcar line that opened in 2014 makes it possible to get around without a car, and farm-to-table restaurants abound. While homes in downtown may be priced a little high for first-time buyers, more affordable options are not far away. The Sam Hughes neighborhood near the University of Arizona, with quiet streets and midcentury modern homes, is a favorite. This three-bedroom home built in 1945 is right in the thick of it.
Of course, as a Sun Belt city, Tucson has a strong pull for retirees, too—it topped our list of the fastest-growing retirement cities in the U.S., with abundant senior communities and golf courses.
4. Chattanooga, TN
Median home price: $189,000
Home price change: +3.6%
Sales change: +2%
RobHainer/iStock
Situated roughly at the midpoint between Nashville, TN, and Atlanta, Chattanooga offers a convenient—and cheaper—alternative to both
U.S. News & World Report, which put Chattanooga at No. 55 on its Best Places to Live list, called it “the comeback kid of Tennessee,” noting that Walter Cronkite once called it “the dirtiest city in America.”
Well, the Scenic City has definitely cleaned up its act, with a $120 million redevelopment of the riverfront which now encompasses apartment buildings, family-friendly restaurants, museums, an amphitheater, and parks. There’s a car-free bridge over the Tennessee River which connects to even more parks. A growing arts district anchored by the new Hunter Museum of American Art has also helped spur development downtown, with a crop of new single-family homes and townhouses.
“Everybody wants to be downtown; that’s the happening thing,” says Vicki Trapp, managing broker at Crye-Leike Real Estate Services, based in downtown Chattanooga.
As a result, prices have exploded. A two-bedroom condo in a low-rise building with river views would start at around $300,000, she says (like this one), with two-story townhouses ringing up higher. That’s usually out of reach for millennials, who tend to rent downtown. Meanwhile, folks can get a three-bedroom, two-bath townhouse or single-family townhouse in the suburbs for about $200,000 (like this one in charming Red Bank).
5. Columbia, SC
Median home price: $178,000
Home price change: -0.2%
Sales change: +5.5%
SeanPavonePhoto/iStock
South Carolina’s runaway growth is on full display in Columbia, the state capital.
Sherry Chesnutt, a real estate agent at Coldwell Banker Residential Brokerage in Columbia, says about two-thirds of her business is from out of state—in part because of the presence of Fort Jackson Army Base. Employers such as Amazon’s fulfillment center in West Columbia and the University of South Carolina are also a draw.
With ultra-affordable homes, Columbia is financially attractive to a wide swath of buyers from other parts of the country.
“We sell a lot of $150,000 houses,” Chesnutt says. Those are typically three beds, two baths in about 1,500 to 1,700 square feet with a yard, in the burbs.
Prices have been rising over the past three years, she says, but they’re still reasonable. The challenge is actually nabbing the house you want—there’s a lot of competition, and bidding wars tend to drive up those low list prices.
“A lot of the new construction is in the $200,000 price range,” Chesnutt says. ” For $300,000, I can get you a huge house with five bedrooms and 3.5 to four bathrooms going out of the city limits.”
The Rosewood neighborhood, near the University of South Carolina, has some lovely wooden bungalows built in the 1950s for $100,000 to $200,000 (here’s an adorable example). The formerly industrial area is anchored by City Roots, an urban farm that opened in 2009 and now draws thousands of visitors each year for tours, festivals, markets, and even drop-in volunteer farming.
6. Rochester, NY
Median home price: $149,000
Home price change: +0.4%
Sales change: +4.7%
Davel5957/iStock
On the banks of Lake Ontario, Rochester has two major “near Ivy” universities—the University of Rochester and Rochester Institute of Technology—that are among its biggest employers and also provide a steady supply of well-educated talent.
Whereas once the suburbs were considered the only desirable place to live, the revitalized downtown is attracting younger residents with restaurants, nightlife, and new luxe housing options. Other desirable neighborhoods that are downtown-adjacent include Park Avenue and Neighborhood of the Arts, where single-family homes tend to run in the $200,000 to $300,000 range.
Local real estate agents report that they’re seeing significant interest from out-of-town investors within the region, including from Toronto and other cities in upstate New York. This 6-bedroom home is marketed as being easy to convert back to a duplex for rental income.
7. Colorado Springs, CO
Median home price: $312,000
Home price change: +6.3%
Sales change: -1.4%
CatLane/iStock
Colorado Springs topped U.S. News & World Report’s Best Places list in 2018 (and often makes our list of the hottest markets in the U.S.). It’s since fallen to No. 3, but it’s still an incredibly appealing town, with the beauty and recreational opportunities of the Rocky Mountains, sunny weather, and a low cost of living. The job market, especially in aerospace, defense, cybersecurity, and technology sectors, is strong. It’s also a commutable option for home buyers who are priced out of Denver.
Home to the flagship U.S. Olympic and Paralympic Training Center as well as the United States Olympic Committee headquarters and several other U.S. Olympics bodies, Colorado Springs is planning two major stadiums for the southwest downtown area.
And the presence of five military bases in the area also has a strong influence on the housing market. The elimination of the cap on Veterans Affairs loans, effective January, will likely drive bigger military home purchases.
8. Winston-Salem, NC
Median home price: $169,000
Home price change: +0.5%
Sales change: +3.6%
BSPollard/iStock
Winston-Salem was ranked the American city with the most livable downtown by both the New York Times and the Wall Street Journal in 2017, showing that the city’s revitalization efforts have really paid off. The mix of new hotels, restaurants, and apartment complexes appeals to both millennials and retirees.
“We are having a huge transformation of our downtown from an old, urban tobacco town,” says Ashley Lay, a real estate agent at Keller Williams Realty Elite in Winston-Salem. “The factories have been turned into condos.”
Those condos run $375,000 and up for two beds, two baths (here’s a lovely but pricey example). There are also single-family homes, typically three beds, two baths, for about $325,000; these are typically remodeled 1920s or 1930s homes, like Craftsman bungalows, in downtown neighborhoods like West End and West Salem (or in nearby Washington Park, like this one).
In the suburbs, Lay says her “sweet spot” is about $220,000, which translates to a 2,000-square-foot home between 5 and 20 years old, with three or four bedrooms, two baths, maybe a basement, and a two-car garage.
9. Charleston, SC
Median home price: $270,000
Home price change: +1.9%
Sales change: +1.2%
Kruck20/iStock
Historic Charleston has long been a tourist favorite, and many who have admired its cobblestone streets and pastel antebellum homes decide to stick around for good. But be warned—those classic Charleston Colonials usually start around $1 million and go well above that.
Many transplants come for the jobs in the military, defense, and aerospace sector, at the South Carolina Port Authority and Charleston Air Force Base. Volvo and Boeing are also here. There’s also a sizable retiree population, especially from colder and more expensive Northeast cities.
“They want to live close to downtown. But when they come down here and see what they have to pay for it, they all get discouraged,” says Randy Bazemore, a real estate broker at Century 21 Properties Plus in Charleston. “They have to move to the suburbs.”
That’s where a three-bed, two-bath with a yard is quite reasonable. Mount Pleasant, on the water just outside Charleston, is a hot market right now, attracting millennials with tech money who want good schools.
“They’re buying single-family homes, mostly in the $350,000 to $400,000 range,” Bazemore says. (Here’s one with plenty of room to play.)
10. Memphis, TN
Median home price: $188,000
Home price change: +3%
Sales change: +0.1%
Davel5957/iStock
Memphis has had a booming investment market for the past five years or so, but there are also a lot of relocations, thanks to employers like Hilton Hotels, AutoZone, and International Paper.
Kelly Erb, a real estate agent at Marx Bensdorf Realtors-Memphis, estimates that about 20% of her business is relocations.
“We really have seen a lot of new development downtown. They’re tearing down old buildings and revitalizing some of those older areas,” she says. “The city has put a lot of money into green spaces, bike lanes, walking trails.”
Plus, a lot of older warehouses are being converted to condos, starting around $150,000 to $300,000. (Here’s a sleek converted loft.) The sprawling Midtown area is also getting filled in with new construction—single-family, three-bed, two-bath homes with a small yard that go for $250,000 to $450,000. (This newly renovated bungalow boasts “Midtown charm.”)
Many flock to the suburbs for good schools, and Germantown and Collierville have been getting a lot of new construction. Homes there tend to run $350,000 to $600,000 for four bedrooms and three baths.
The post Here Are 2020’s Top Real Estate Markets: Affordable Alternatives to Megapricey Cities appeared first on Real Estate News & Insights | realtor.com®.
source https://www.realtor.com/news/trends/for-2020-top-real-estate-markets/
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