A whirlwind year for homebuyers and sellers, especially in these top housing markets
As discussed in our 2022 housing forecast and economic overview, we expect the year ahead to be a whirlwind for homebuyers and sellers alike. In this update, we’re going to dive into the top ten markets to see what’s propelling these areas to the top of our real estate charts. The overarching trends that drove the national forecast, are visible in these top markets.
Top 10 Housing Markets Positioned for Growth in 2022
Ranking is based on the combined yearly percentage growth in both home sales and prices expected in 2022 among the top 100 largest markets in the country per Realtor.com’s metro level housing forecast. In cases of a tie, Sales Growth y/y was used as a tiebreaker.
Geographic Hotspots: Mountain West, Midwest, New England and the South
If you follow some of our metro market rankings, either our monthly hottest markets or our collaboration, the Wall Street Journal/Realtor.com Emerging Housing Markets Index, you won’t be surprised to see the Mountain West, Midwest and housing markets outside of the Boston area topping our list for 2022. These markets are home to healthy local economies that have low unemployment rates — 4.1% in the September 2021 data vs. 5.1% in the top 100 markets overall. They’ve also seen substantial job growth, of 3.4% vs. 2.5% in the year ending in September, and this advantage is expected to continue into the next year. Tech jobs play a role since often shoppers looking for real estate in these areas are coming from tech centers where real estate is even more competitive, pricey, and sometimes feels out of reach. On average, markets in our top-ten have a slightly higher share of Science, Technology, Engineering, and Mathematics (STEM) jobs (6.9% vs. 6.5%), and in particular Seattle, Salt Lake City, Columbus, and Boise stand out.
Residents Are Looking for Remote Work from Here
Even though many of these top markets have strong local economies and growing tech scenes, data suggests that some workers in these areas may be looking for the best of both worlds. This finding is in line with data on worker preferences for remote-work and the competitive labor market. The share of workers applying to jobs with “Remote work” key words, according to LinkedIn, is well above average in Boise (32%), Spokane (33%), and even above average in the Salt Lake City area (26.3%). 1
Young Households Drive Demand for Some while Others Draw Retirees
On average, our top markets have a slightly higher population share of younger people, aged 25-34. These individuals are crucial for the housing market because household formation and homeownership rise strongly among this group–a force that translates into housing demand wherever they are. Younger individuals make up notably larger shares of the populations of Seattle, Salt Lake City, and Columbus. Older households play a key role in top markets including Tampa, Greenville, Providence, and Spokane.
Growing Markets Attract Outsiders, Especially from Big Cities
These areas have seen recent household growth that outpaces the 100-market average (1.8% vs. 1.4%) and this advantage is projected to continue in 2022. The strong local economies of these areas attract outsiders. Our cross-market demand data shows that 51.5% of recent shopping traffic in these areas originated from viewers outside of the market, compared with just 50.3% for the 100-market average. In particular, Greenville, Boise, Spokane, and Worcester had the highest shares of non-local viewers.
Notably, shopping interest is flowing into these areas from a few key locations. Shoppers from the Big Apple (New York metro area) were among the top-ten sources of traffic in each of these metros. The next most-prevalent source of traffic was Seattle — one of our metros expected to do well in 2022. The dynamics in Seattle make it a strong draw for techies fleeing California — San Francisco was its number one source of outside traffic, and other California tech-influenced markets including Los Angeles, Sacramento, and San Jose, were also among the top-ten sources of inbound traffic to Seattle. At the same time, current Seattle residents are looking elsewhere. Seattle was a top traffic contributor to each of our top-ten markets except Columbus, Ohio (and Seattle itself, by definition). While some cities contributed broadly, for other areas the influx was more concentrated. Shoppers from San Francisco and San Jose are noted contributors to real estate traffic in the Mountain West markets of Boise, Seattle, and Spokane. Shoppers from Boston (and to a lesser extent New York) contributed to traffic in the Northeastern markets in our top-ten: Providence and Worcester. While the Tampa area draws real estate traffic from across the country, traffic from the Boston area is notably not a top-10 source (Pats fans may love Brady, but they don’t seem to be following him to Tampa, at least not yet).
The Top Markets Are Generally Small and Less Crowded
Our national forecast highlighted the continuing allure of the suburbs, and the dynamics influencing that trend are seen in the metro data. Only two of our top-10 forecast markets are among the largest metro areas in the country: Seattle (ranked 14 by household size) and Tampa Bay (ranked 17 by household size). Additionally, even though 3 of our top markets have above average density (the two biggest plus Providence), on average our top markets have 60 fewer people per square mile than the average among the top 100 markets. We also see larger homes for sale. The median listing in these markets is 1,936 square feet compared to just below 1,889 for the 100-markets on average in the 12 months ending November 2021.
Affordability is Relative and Getting Harder to Come By
Asking prices for homes in our top markets on average are more expensive than among all 100-markets and this is true whether looking at the total price or price per square foot. The average listing price was $431,000 in November for the top-ten compared with just $397,000 for the 100-markets on average. The premium for the top markets shrinks once square footage is factored in, but it doesn’t completely disappear. The average price per square foot for listings in the top-ten markets is $229 compared with $223 among all 100-markets. Notably, the 9% premium on listing prices is reduced to a 3% premium when square footage is considered. But looking at averages in this case obscures the true picture. Half of the markets poised for growth in 2022 are affordable relative to just about anywhere — Indianapolis and Columbus have typical asking prices below $300,000 in November while Greenville, Tampa, and Worcester are just slightly pricier and still below the 100-market average. The remaining markets are pricier than the typical U.S. market, but remain a relative bargain for shoppers from certain areas. For example, Salt Lake City, Boise and Spokane range from $466,000 to $555,000 for November median asking prices and $216 to $277 per square foot — still a bargain relative to Seattle with a median price of nearly $676,000 and price per square foot of $388. But even Seattle is a comparative bargain to pricey Silicon Valley real estate with asking prices near $1 million and price per square foot at $700 and up. However, with sales prices expected to rise 7.4% for these markets on top of the 14.1% they increased in 2021, even these affordable areas may not feel like a bargain.
2022 Top 10 Housing Markets
|Median home price: $564,062|
|Home price change: +8.5 percent|
|Sales change: +15.2 percent|
|Combined sales and price growth: +23.7 percent|
Salt Lake City took the No. 1 spot on this year’s top market list. Located on the Northern side of the state, Salt Lake is an outdoor enthusiast’s dream with its close proximity to some of the best skiing, hiking, fishing, and mountain biking in the country. Since the beginning of the pandemic, remote work has prompted an influx of transplants from California and Colorado looking for affordable homes, low cost of living and good schools. Lehi, Utah, also known as Silicon Slopes for its booming tech industry, is just 25 miles away from Salt Lake and home to SanDisk, Adobe and eBay facilities.
|Median home price: $503,959|
|Home price change: +7.9 percent|
|Sales change: +12.9 percent|
|Combined sales and price growth: +20.8 percent|
Boise, Idaho is No. 2 on Realtor.com®’s top markets of 2022 list. Also, driven by a combination of remote work and a desire for outdoor activities such as hiking, skiing, snowshoeing, Boise has become a relocation destination for California transplants. It has a booming job market with employers like Micron Technology, Albertsons, and Boise State University. Great restaurants, bars, and shops line its vibrant downtown area which draws a crowd of all ages and walks of life. The Boise River Greenbelt runs through the east side of the city and includes a series of tree-dotted trails and parks hugging the water’s edge.
|Median home price: $419,803|
|Home price change: +7.7 percent|
|Sales change: +12.8 percent|
|Combined sales and price growth: +20.5 percent|
Located near the Idaho border, Spokane takes the No. 3 spot on this year’s list. With the Spokane River running through the city, residents can take part in an abundance of waterfront activities, while less rain and more sun than nearby Seattle means the best of warmer months and winter fun. With easy access to amenities, restaurants and nightlife in downtown areas like Riverside, Spokane offers homebuyers both the luxuries of a bigger city and a relatively low cost of living, including more affordable housing, than nearby Seattle, Portland and Tacoma. It has a concentration of well-ranked public schools, including Libby Center and Wilson Elementary, making it an attractive option for young families – perhaps those settling down after attending one of the many surrounding universities like Gonzaga, or Whitworth.
|Median home price: $272,401|
|Home price change: +5.5 percent|
|Sales change: +14.8 percent|
|Combined sales and price growth: +20.4 percent|
Like many of the cities on Realtor.com®’s 2022 ranking, No. 4 market Indianapolis has a small town feel despite being the 15th largest U.S. city. The market has an 8% lower cost of living than the national average, including low taxes, as well as the ability to get pretty much anywhere in the entire city within about an hour. It is also home to the top-rated Indianapolis Colts and annual big-draw sporting events like the Indianapolis 500 and the NCAA tournaments, and multiple universities like Indiana-Purdue and Butler. With relatively spacious homes and affordable prices, Indianapolis is drawing in buyers who are finding a good sense of community in areas like Carmel, Zionsville and Noblesville, as well as property investors.
|Median home price: $298,523|
|Home price change: +6.3 percent|
|Sales change: +13.7 percent|
|Combined sales and price growth: +20.0 percent|
Coming in at No. 5, Columbus is Ohio’s capital and its fastest-growing city. The market is attracting a number of transplants from more expensive areas in the West, a trend that has accelerated with the rise in remote work. Also home to Realtor.com®’s No. 6 Hottest ZIP Code in 2021 (ZIP 43228 Lincoln Village), people are drawn to Columbus’s booming job market, low cost of living and top-rated schools like New Albany High. Large employers in the area include L Brands, the parent company of Victoria’s Secret and Bath & Body Works, as well as Nationwide Insurance. Locals enjoy cheering on the Ohio State Buckeyes and visiting parks like Hoover Reservoir and Alum Creek for water sports.
|Median home price: $419,813|
|Home price change: +9.5 percent|
|Sales change: +8.1 percent|
|Combined sales and price growth: +17.7 percent|
Providence has landed in the No. 6 spot on this year’s list. Rhode Island’s capital city is known for its hospitals and universities, being home to eight of each, including Ivy League Brown University. Providence also has great public schools including Classical High School. Residents enjoy the city’s central location with easy access to Boston and New York without the high price tags. Providence is also known for great restaurants, nightlife and art, including its famous WaterFire installation.
|Median home price: $305,078|
|Home price change: +5.7 percent|
|Sales change: +11.4 percent|
|Combined sales and price growth: +17.1 percent|
Greenville, at No. 7, offers low income and property taxes, small-town flavor, incredible weather and access to the great outdoors, with multiple local spots for walking, kayaking and hiking. In the center of downtown Greenville, Falls Park is host to restaurants, breweries and shopping, and offers spectacular views of Reedy River Falls from the Liberty Bridge. Greenville offers easy access to popular vacation destinations like the Smoky Mountains, Hilton Head and Myrtle Beach. While the area is experiencing lots of new construction growth, home prices are still relatively affordable. Plus, Greenville has its own booming economy, including big employers like BMW and Michelin, and a variety of public, charter, private and religious schools.
|Median home price: $666,754|
|Home price change: +7.5 percent|
|Sales change: +9.6 percent|
|Combined sales and price growth: +17.1 percent|
Landing on the list of homebuyer hotspots for the second year in a row is Seattle, which has seen an influx of Californians. As the headquarters of big companies like Amazon, Starbucks and Expedia, many new residents have relocated to Seattle for high-paying job opportunities during the pandemic. Perhaps making up for a higher-than-average cost of living, the “Emerald City” offers great weather across seasons and easy access to nature, with multiple lakes, islands, the Puget Sound, and even ski resorts and nearby wine country. While the Seattle suburbs are drawing in buyers who want more space, schools across the region are top notch. Plus, the city boasts the top-ranked University of Washington.
|Median home price: $397,188|
|Home price change: +8.2 percent|
|Sales change: +8.4 percent|
|Combined sales and price growth: +16.6 percent|
At No. 9 on this year’s list is Worcester, the second largest city in Mass and home to Realtor.com®’s No. 7 Hottest ZIP Code in 2021 (ZIP 01757). At the heart of the state, Worcester offers easy access to interstate highways via the Mass Pike as well as a commuter train to Boston, as well as relatively affordable housing, top-rated schools and easy access to the outdoors. The city is also going through a massive redevelopment surrounding the opening of the Worcester Red Sox’s Polar Park. Combined with a vibrant cultural and arts scene and a strong jobs market fueled by local employers like UMass Medical School, Worcester is attracting young buyers, including graduates from surrounding colleges like Clark and Holy Cross.
|Median home price: $335,814|
|Home price change: +6.8 percent|
|Sales change: +9.6 percent|
|Combined sales and price growth: +16.4 percent|
Rounding out Realtor.com®’s 2022 top markets is Tampa at No. 10. Located along Florida’s Gulf Coast, Tampa’s beautiful beaches, great weather and year-round living make it a popular destination for vacationers and retirees. But Tampa also has plenty to offer young professionals and families, from good schools and low-cost of living, including no state income taxes, to relatively affordable housing and plentiful new construction within reasonable commuting distance of the downtown area. With the rise of remote work during the pandemic, Tampa real estate activity is booming as buyers migrate from big cities like New York and Chicago.