The Hottest Real Estate Markets of 2019

Since the housing market crash of 2008 and the ensuing recession, the U.S. economy has not only recovered, but enjoyed steady growth. Beginning in 2012, an improved job market, low interest rates, and low rates of new home construction have meant that demand for homes has outpaced supply, causing home prices across the country to increase. Despite worries of a cool down, the housing market is still going strong.

Making up nearly 40 percent of all home-buyers, millennials are driving the housing market. Many millennials are fleeing expensive areas such as San Francisco, Seattle, and Portland, and moving to more affordable locales with strong job markets and attractive amenities such as outdoor recreation activities, universities, and highly-ranked public schools. As a result, home prices haven’t increased equally across the country. The influx of new residents to lower-priced, smaller metros has caused home demand to skyrocket in these areas, driving up home prices in states like Idaho and Utah.

To determine the hottest U.S. real estate markets, researchers at Construction Coverage analyzed data from Zillow to create a composite score based on the following four factors:

• 1-year change in list price – The percentage change in the median list price of homes. This metric is an indicator of recent home price growth.
• Sale-to-list price ratio – The ratio of the sale price to the list price indicates how far above or below asking price homes are selling for. In hyper-competitive real estate markets, sale prices often exceed list prices.
• Average age of inventory – The median number of days active listings have been on the market is an indicator of how quickly homes are selling.
• Projected 1-year change in home value – The forecast indicates how much homes are expected to increase or decrease in value over the next year.

Only the 150 largest metro areas in the U.S. were used for this analysis.

Takeaways

• Low mortgage rates, increased home demand, and a shortage of homes have pushed up home prices across the country since 2012. While real estate markets along the coasts have cooled down, locations in the Midwest and Mountain regions experienced significant price increases in the last year. Some larger metro areas such as Ogden, UT have seen prices increase by nearly 14 percent since 2018.
• Millennials make up a large proportion of homebuyers and account for the biggest number of mortgage originators; they are driving the housing market, causing demand for homes in more affordable midsize metros to rise.
• While home values in some parts of the country may start leveling off in the near future, home values in the country’s hottest real estate markets are projected to see large increases in the next year, with some expected to rise by nearly 10 percent. Across the entire U.S., home prices are expected to rise 2.5 percent in the next year.

Among large metro areas, here are the 15 hottest U.S. real estate markets:

The 15 Hottest Real Estate Markets

15. Tucson, AZ

• Median list price: $244,502
• 1-year change in list price: 4.4%
• Sale-to-list price ratio: 97.4%
• Average age of inventory: 57 days
• Projected 1-year change in home value: 3.1%

The Southeast desert town of Tucson was hit hard by the 2008 recession and saw housing prices plummet. But steady growth in the region combined with a robust job market have enabled the real estate market to rebound. A large student population, a substantial seasonal rental population, and several large employers, including the University of Arizona, Raytheon Missile Systems, and Davis-Monthan Air Force Base, all contribute to the strength of Tucson’s real estate market.

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14. Visalia, CA

• Median list price: $265,256
• 1-year change in list price: 5.5%
• Sale-to-list price ratio: 97.4%
• Average age of inventory: 63 days
• Projected 1-year change in home value: 3.6%

California’s Central Valley is home to Visalia, one of the more affordable cities in the state. Housing prices are much lower here than in the Bay area, Los Angeles, or San Diego, and many young families return to Visalia after college in search of more affordable homes. The city’s recent growth comes with more amenities that are attracting new residents to the area and encouraging old residents to stay.

13. Columbus, OH

• Median list price: $248,325
• 1-year change in list price: 5.3%
• Sale-to-list price ratio: 97.3%
• Average age of inventory: 60 days
• Projected 1-year change in home value: 3.5%

Compared to other Rust Belt cities, Columbus has a strong job market and has enjoyed healthy growth. Relatively limited space has pushed up housing prices in recent years, but a low cost of living helps attract and keep residents.

12. Colorado Springs, CO

• Median list price: $340,467
• 1-year change in list price: 2.0%
• Sale-to-list price ratio: 99.0%
• Average age of inventory: 42 days
• Projected 1-year change in home value: 3.5%

Colorado Springs offers the beauty of Colorado without the Denver price tag. The large millennial population in Colorado Springs indicates a substantial number of potential first-time home buyers, and the area’s strong job growth has made an impact on the real estate market.

11. Milwaukee, WI

• Median list price: $247,392
• 1-year change in list price: 11.4%
• Sale-to-list price ratio: 96.8%
• Average age of inventory: 56 days
• Projected 1-year change in home value: 3.1%

Low inventory and increased demand have pushed up real estate prices in Milwaukee in recent years. Millennials are competing to buy in Milwaukee’s hottest neighborhoods while empty-nesters are seeking to downsize in nice, walkable areas. Yet, homes are still more affordable here than in many other parts of the country.

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10. Lincoln, NE

• Median list price: $260,721
• 1-year change in list price: 7.8%
• Sale-to-list price ratio: 97.3%
• Average age of inventory: 61 days
• Projected 1-year change in home value: 3.4%

Lincoln’s healthy real estate market is due in no small part to its low unemployment rate, steady job growth, and affordability. Home to the University of Nebraska, the state capital still has a small-town feel despite its growth, and homebuyers are eager to settle in this Midwestern town.

9. Memphis, TN

• Median list price: $193,800
• 1-year change in list price: 8.6%
• Sale-to-list price ratio: 97.3%
• Average age of inventory: 61 days
• Projected 1-year change in home value: 3.4%

A story of low inventory and increased demand characterizes many of the nation’s hottest real estate markets, including Memphis. Some of the city’s neighborhoods are seeing a flurry of housing market activity with new schools, such as Collierville’s new high school, bringing potential homebuyers to those neighborhoods in droves. Still, Memphis boasts some of the most affordable homes on this list.

8. Grand Rapids, MI

• Median list price: $257,270
• 1-year change in list price: 7.3%
• Sale-to-list price ratio: 97.5%
• Average age of inventory: 66 days
• Projected 1-year change in home value: 5.4%

Grand Rapids is the second largest city in Michigan and its metro area is the fastest growing, according to data from the Census Bureau. The metro area’s large millennial population indicates a substantial number of potential first-time homebuyers, and the area’s healthy economy make Grand Rapids an attractive place to live and buy a home.

7. Provo, UT

• Median list price: $357,246
• 1-year change in list price: 2.6%
• Sale-to-list price ratio: 101.0%
• Average age of inventory: 49 days
• Projected 1-year change in home value: 5.6%

Provo is among several northern Utah cities that have seen large population and home price growth in recent years. The city is located 45 miles south of Salt Lake City and is flanked by the Wasatch Mountains to the east and Utah Lake to the west. Convenient access to outdoor recreation entices families pursuing active lifestyles. At the same time, Brigham Young University attracts academics, and brings a wide selection of cultural events to the area.

6. Killeen, TX

• Median list price: $190,717
• 1-year change in list price: 9.3%
• Sale-to-list price ratio: 99.4%
• Average age of inventory: 65 days
• Projected 1-year change in home value: 3.8%

The Central Texas metro area of Killeen is one of the fastest growing cities in American, thanks in large part to the local army base, Fort Hood. The region boasts a robust economy, much of which revolves around the military base. Killeen hosts a range of cultural and recreational opportunities, including museums, theaters, farmers’ markets, and outdoor parks. Fortunately for residents, Killeen offers substantially lower living costs than nearby Austin.

5. Salem, OR

• Median list price: $319,213
• 1-year change in list price: 5.4%
• Sale-to-list price ratio: 98.8%
• Average age of inventory: 55 days
• Projected 1-year change in home value: 4.1%

Home prices all over the Pacific Northwest have risen in recent years, including in Salem. Although prices are higher than they were a few years ago, Salem is still much more affordable than nearby Portland and Seattle. The capital city’s relative affordability makes it an attractive alternative to young families seeking to settle down and buy a home.

4. Salt Lake City, UT

• Median list price: $373,754
• 1-year change in list price: 4.8%
• Sale-to-list price ratio: 102.4%
• Average age of inventory: 47 days
• Projected 1-year change in home value: 5.6%

The state of Utah has experienced significant population growth in the last few years, with much of this growth concentrated in Salt Lake City. Along with population growth, Utah’s low cost of living and Salt Lake City’s business friendly environment keep demand for homes high while supply has struggled to keep up.

3. Spokane, WA

• Median list price: $270,500
• 1-year change in list price: 12.0%
• Sale-to-list price ratio: 98.8%
• Average age of inventory: 56 days
• Projected 1-year change in home value: 7.5%

Compared to other Pacific Northwest cities Seattle and Portland, Spokane is still affordable even though prices are rising rapidly. Like other hot real estate markets, a low inventory of homes can’t keep up with demand. The eastern Washington city is a perfect mix of nature and urban living, making it a popular place for homebuyers.

2. Boise, ID

• Median list price: $323,633
• 1-year change in list price: 9.1%
• Sale-to-list price ratio: 99.3%
• Average age of inventory: 47 days
• Projected 1-year change in home value: 9.2%

Many millennials are leaving expensive cities such as San Francisco, Seattle, and Portland and moving to more affordable midsize metros like Boise. The influx of new residents has driven up demand for homes, causing prices to drastically rise in recent years. Low crime rates, abundant recreation activities, and good schools are a big draw for new residents who have been priced out of larger, high-cost metro areas.

1. Ogden, UT

• Median list price: $337,450
• 1-year change in list price: 13.5%
• Sale-to-list price ratio: 102.3%
• Average age of inventory: 44 days
• Projected 1-year change in home value: 7.8%

Ogden has enjoyed a booming real estate market since 2013. Drawing both in- and out-of-state homebuyers, the northern Utah city has seen home prices increase to record highs. A low cost of living combined with gorgeous mountain scenery and plentiful outdoor recreation activities make Ogden a highly desirable place to buy a home.

Methodology & Full Results

Statistics on real estate markets are from Zillow. To identify the “hottest” real estate markets in the U.S., a composite score was calculated based on the following metrics for each metropolitan statistical area:

• 1-year change in list price
• Sale-to-list price ratio
• Average age of inventory
• Projected 1-year change in home value

Only the 150 largest metropolitan areas were included in the analysis.