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Florida’s Top 5 Metro Hotspots for Relocation

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The Florida housing market continues to make headlines as it remains one of the top choices for homebuyers seeking to relocate within the United States. In the third quarter of 2023, approximately 25.9% of homebuyers explored opportunities in different parts of the country, a figure that has remained relatively stable since August.

This number represents a slight increase from the previous year, showing a steady trend of people looking to move to new horizons. Data supporting these findings is based on extensive analysis of over two million home searches conducted through Redfin's website, spanning more than 100 U.S. metro areas from July 2023 through September 2023.

Florida's Top 5 Metro Hotspots for Relocation

Among the plethora of options in the Florida housing market, there are five standout metros that are particularly appealing to homebuyers looking to make the move. Let's explore these coveted destinations:

1. Orlando, FL

Orlando has emerged as one of the top choices for homebuyers, with a net inflow of 4,000 in the third quarter of 2023. Its top out-of-state origin is New York, NY, indicating that many New Yorkers are seeking a new life in the Sunshine State.

2. North Port-Sarasota, FL

North Port-Sarasota ranks high on the list of desirable destinations, with a net inflow of 3,700 in Q3 2023. Like Orlando, its top out-of-state origin is New York, NY, showing a clear preference among New Yorkers for this beautiful Florida region.

3. Tampa, FL

Tampa, with a net inflow of 3,400 in the third quarter of 2023, is another hot spot for those looking to make the move. Once again, New York, NY, stands out as the top out-of-state origin, indicating a strong connection between Tampa and the Empire State.

4. Cape Coral, FL

Cape Coral, with a net inflow of 3,300 in Q3 2023, is a flourishing destination in the Florida housing market. It attracts a significant number of newcomers from Chicago, IL, which is its top out-of-state origin.

5. Miami, FL

Miami, renowned for its vibrant culture and beautiful beaches, remains a top choice for homebuyers with a net inflow of 3,200 in the third quarter of 2023. Once again, New York, NY, takes the lead as the top out-of-state origin for those moving to Miami.

Florida Dominates the List of Preferred Destinations

What's intriguing about this trend is the dominance of Florida in the list of preferred destinations. Half of the top 10 most popular places to move are situated in the Sunshine State. This trend highlights the state's magnetism for those looking to relocate. Additionally, it's interesting to note that eight out of these ten popular destinations are located on the East Coast, showing the increasing allure of coastal living.

Despite the presence of increasing climate risks, the allure of Florida's housing market remains strong. Many of the places that homebuyers are moving to are more affordable than their places of origin. This affordability factor is a key driver behind this relocation phenomenon. People are drawn to the idea of a more financially sustainable life without compromising on the quality of living.

A notable case that exemplifies this trend is Austin, Texas. In early 2021, Austin was the top move-to metro in the nation. However, it has seen a decline in popularity in recent years. Several factors contributed to this decline:

By mid-2022, Austin's home prices had surged by more than 75% compared to pre-pandemic levels. This surge in prices made the city less attractive compared to other regions.

The increase in home prices also resulted in a substantial rise in monthly mortgage payments. A typical monthly payment for Austin's median-priced home reached $3,890, almost double the $2,136 monthly payment in 2019.

As some remote workers transitioned back to in-person work, they opted to return to their hometowns or seek employment in major job hubs. The changing dynamics of the labor market played a role in this shift.

The case of Austin offers valuable insights into the evolving preferences of homebuyers. While Austin witnessed a decline, Florida's housing market is thriving, especially in certain metro areas.

Thus, Florida's housing market continues to shine in 2023, with these five metros leading the way. The affordability, vibrant communities, and diverse opportunities in the state make it a top choice for those looking for a fresh start. As remote work and changing priorities reshape where people want to live, Florida remains a bright spot on the map of desirable destinations.

Top 10 Cities Where Home Prices Are Projected to Rise in 2024

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The housing market is expected to continue to grow in 2024 and beyond. Zillow now forecasts that the national Home Value Index will rise by 4.9% from August 2023 through August 2024. However, not all cities will experience the same level of growth. Some cities are poised to see significant price increases, while others may see more modest growth or even a decline in prices.

This article will look at the 10 cities where housing prices are expected to grow the most in 2024. These cities are all located in different parts of the United States, and each has its own unique appeal. If you are considering buying a home in 2024, one of these cities may be a good place to start your search.

Housing Market Predictions for 2024

In September 2023, SmartAsset analyzed Zillow data, ranking the largest 2,000 U.S. zip codes by projected home price increases. This study unveils cities and their corresponding zip codes with optimistic home value projections. According to SmartAsset, such predictive models assist potential buyers in deciding whether to purchase now or wait for the winter months. It also provides sellers valuable insights for optimal listing timing.

Key Findings

Miami and Knoxville: Hotspots for Growth

Leading the pack, Rio Grande City, TX (78582), projects the highest home value increase at 12.3%. Knoxville and Miami neighborhoods claim four spots in the top 10. Notably, Knoxville's 37920 neighborhood may see a 9.5% growth, and the 37918 neighborhood an 8.3% increase. In North Miami, the 33161 neighborhood anticipates an 8.8% growth, followed by 8.5% in the 33162 neighborhood of North Miami Beach.

The Southern Surge

Approximately 80% of the top 50 projected home price increases are concentrated in the South. This includes Winston-Salem, NC (27105, 8.7%; 27107, 7.3%); Athens, GA (30605, 7.9%; 30606, 7.7%); Myrtle Beach, SC (29588, 7.8%); Savannah, GA (31419, 7.8%); and Charlotte, NC (28208, 7.5%).

NYC's Rising Neighborhoods

In New York City, Fort George (10040), Jamaica (11434), and Washington Heights (10032) are set to witness the most substantial growth in home values, projecting a 7% or more increase by next summer.

Across Major Cities

Several neighborhoods in major cities exhibit noteworthy growth. In Chicago, the 60623 neighborhood foresees a 4.9% increase in home values by next summer. Meanwhile, Phoenix's 85009 area expects a 6.9% growth, contrasting with San Francisco's 94121 area, projecting a mere 1.7% increase.

Noteworthy Increases in California

In San Diego, the Carmel Valley neighborhood (92130) is expected to experience a 5.3% growth, amounting to a $98,382 average price increase on the current $1.85 million home value. Other areas in California with significant price hikes include 90275 in Rancho Palos Verdes ($92,403), 92024 in Encinitas ($80,541), 92705 in North Tustin ($77,510), and 93117 in Goleta ($75,213).

Top 10 Cities Where Home Prices Will Rise in 2024

1. Rio Grande City, TX: 78582

Home values are expected to increase by 12.3% within the 78582 area code, bringing the average price from $113,368 in July 2023 to a projected $127,312 in July 2024.

2. Knoxville, TN: 37920

In the Kimberland Heights section of Knoxville, home values are expected to increase by 9.5% between this summer and next summer. This would bring the average home value up to $310,699, from the current $283,744.

3. North Miami, FL: 33161

This area of Miami is projected to see an 8.8% increase in home values by next summer, bringing the typical home value up to $501,725 from $461,145 this year.

4. Winston-Salem, NC: 27105

Home values in Winston-Salem are forecast to climb 8.7%. That would make the average home value $163,269 by summer 2024, or more than a $13,000 increase from this summer.

5. Muskegon, MI: 49442

As of July 31, 2023, home prices in the 49442 area of Muskegon averaged $158,324. This is projected to grow to $171,940 – an 8.6% increase – by the same time in 2024.

6. (Tie) North Miami Beach, FL: 33162

The average $443,856 home in 33162 could increase almost $38,000 to $481,584 in just one year if the 8.5% projection holds.

6. (Tie) Brownsville, FL: 33142

The 33142 area in Brownsville is also projected to undergo a 8.5% increase in home values. That would bring the average home to $407,316.

8. Lenoir, NC: 28645

This summer, a home in 28645 is valued at about $191,000 on average. But, it is projected to increase by 8.4% in the next 12 months, with the average value jumping to $206,894.

9. Knoxville, TN: 37918

Homes in 37918 are forecast to increase in value by 8.3%, taking the average home from $304,881 to $330,186.

10. (Tie) Post Falls, ID: 83854

With an 8.2% increase in home values, homes in 83854 would go up from an average of $483,973 to $523,659 in just over one year.

10. (Tie) Donna, TX: 78537

Homes in 78537 also have a projected 8.2% increase in value, but they are a little cheaper: Jumping from $128,844 to $139,409 over the next 12 months.

Data and Methodology: Cities were ranked based on the largest 12-month home value forecast using Zillow’s Home Value Forecast (ZHVF) metric for all homes (single-family residences, condos, and co-ops) in the top 2,000 zip codes by size. Projections were as of July 31, 2023, for July 31, 2024, and were applied to the average home value in each zip code to derive the projected average home value.

Top 10 States Facing a HOUSING CRISIS: Severe Underproduction

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Housing Market Shortage Sharpens in Suburbs, Small Towns, Report Says. A Washington D.C. nonprofit, Up for Growth, devoted to solving the nation’s housing shortage, issued a new report Thursday that found the U.S. housing shortage has “accelerated” in suburbs and small towns.

Up for Growth, which describes itself as a “cross-sector member network” committed to solving the country’s housing shortage and affordability crisis with data, released its second annual report titled “2023 Housing Underproduction in the U.S.”

The study, which tracked the nation’s housing underproduction from 2012 until 2021, showed a “housing deficit that is spreading rapidly to America’s suburbs, small towns, and rural areas — a shift from earlier findings that revealed a housing crisis primarily centered in U.S. coastal and urban areas,” according to a news release.

Understanding Housing Underproduction

The group defines housing underproduction as what occurs when “communities fall short of meeting housing needs,” and it calculates it as the difference between total housing need and total housing availability.

The U.S.’s housing underproduction reached 3.9 million homes in 2021 — a 3% jump from 2019, the study found. However, for the first time in nearly 10 years, housing availability increased in the nation’s top 25 major metro areas as the pandemic’s remote work opportunities allowed thousands of Americans to leave high-cost urban areas.

“On its surface, an easing of the housing shortage in urban areas seems like positive news for homeowners and renters. Instead, it tells the story of a deepening crisis resulting from a century of exclusionary housing policy and set off nearly a decade ago by major demographic shifts, a historic economic recession, and chronic housing underproduction,” Mike Kingsella, CEO of Up for Growth, said in a statement.

“The COVID-19 pandemic enabled thousands of Americans, abruptly freed from the need to go into offices every day, to abandon high-cost urban centers in favor of suburbs, small towns, and rural communities where the housing crisis has intensified,” Kingsella said.

Shift in Housing Shortage

The number of counties across the U.S. experiencing underproduction of housing increased 32%, the study states, and that shortage is shifting from urban areas to outlying areas too with only a minimal increase in availability in urban areas.

“Driven by population loss, housing availability increased 0.3% in urban America,” the study states. “Housing underproduction increased by 4.5% in the suburbs, spurred by high levels of household formation. Due to a sudden and dramatic drop in unit delivery, housing underproduction increased by 47.8% in small towns.”

Top 10 States with Most Severe Shortage

In order of severity, here are the top 10 states with the most severe housing underproduction, according to the Up for Growth study:

  1. California, with a shortage of over 881,000 homes.
  2. Idaho, with a shortage of over 42,000 homes.
  3. Utah, with a shortage of over 61,000 homes.
  4. New Hampshire, with a shortage of over 31,000 homes.
  5. Oregon, with a shortage of over 87,000 homes.
  6. Washington, with a shortage of over 147,000 homes.
  7. Minnesota, with a shortage of over 106,000 homes.
  8. Colorado, with a shortage of over 101,000 homes.
  9. Arizona, with a shortage of over 120,000 homes.
  10. New Jersey, with a shortage of over 144,000 homes.

These figures from 2021 may not consider that states like Utah and Idaho underwent a dramatic housing boom as builders raced to meet demand amid the pandemic housing rush.

That year, Utah made a sizable dent in its housing shortage, according to more local estimates by housing researchers at the University of Utah’s Kem C. Gardner Policy Institute, bringing it to 31,000 in 2021 compared to about 56,800 in 2017. The researchers compared increases in households against increases in housing units.

However, as homebuilding activity contracts amid today’s high mortgage interest rates, those researchers now expect Utah’s housing shortage will worsen, likely to increase to over 37,000 units by 2024.

It’s also worth considering that even though states like Utah and Idaho continue to have a housing shortage problem like other states across the U.S., they’re also among the top states that have built the most housing over the past decade. Their “underproduction” or housing shortages is largely due to the fact that they’re among the fastest growing states in the nation.

“Not a single state is providing enough housing for its citizens, and the nation is poorer, less diverse, and less dynamic than it could be if everyone who wanted it had access to affordable shelter in high-opportunity areas,” Kingsella said.

He urged policymakers to “make the straightforward but difficult choice to prioritize new funding sources that allow for diverse housing types, to invest in construction innovations, and to bolster infrastructure funding despite the risks posed” by not-in-my-backyard opposition groups.

“Only then will we slow the pace of housing underproduction and, over time, begin to reverse it,” Kingsella said.

Read More – What is Housing Underproduction?

Housing Underproduction occurs when communities fall short of meeting housing needs. Up for Growth calculates underproduction as the difference between total housing need and total housing availability.

Not since the beginning of suburbanization in the early 20th century have household formation patterns shifted as dramatically as they have since March 2020. Although the United States produced more housing units in 2020 than in 2019, it was insufficient to meet demand, and production was misaligned with quickly shifting preferences for where people wanted to live.

Housing Underproduction is Getting Worse

Nationally, underproduction increased by nearly 3% to 3.9 million missing homes.

It is Spreading Geographically

The number of counties across the U.S. experiencing underproduction increased 32%.

It is Shifting from Urban Areas to Suburbs and Small Towns

Driven by population loss, housing availability increased by 0.3% in urban America. Housing underproduction increased by 4.5% in the suburbs, spurred by high levels of household formation. Due to a sudden and dramatic drop in unit delivery, housing underproduction increased by 47.8% in small towns.

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Long Island's Housing Crisis: Can New York Fix This Market

Is the Housing Crisis Over in America?

Is the Housing Market Overvalued? Expert Opinions Differ

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Are Home Prices Overvalued? The housing market is in a state of flux, leaving experts divided on whether home prices are overvalued or a reasonable reflection of demand. The opinions on this issue are varied, and it's critical to understand the dynamics at play to make informed decisions.

Realtor.com® Chief Economist Danielle Hale emphasizes that the percentage of income allocated toward housing payments is nearing all-time highs. This raises concerns about the sustainability of current home prices.

Regional Disparities in Overvaluation

An August analysis by Florida Atlantic University and Florida International University researchers revealed that homes in 98 of the 100 largest housing markets are selling above their long-term prices, indicating potential overvaluation.

Ken H. Johnson, a real estate economist at Florida Atlantic University, highlighted that the Sun Belt states, particularly Florida, are experiencing the highest overvaluation.

Impact of the Housing Shortage

The housing shortage plays a significant role in driving up prices. With limited housing inventory, buyers engage in fierce bidding wars, elevating property values. Devyn Bachman, Senior VP of Research at John Burns Research and Consulting, argues that the demand outweighs concerns of overvaluation due to this shortage.

Mortgage Rates and Price Dynamics

Mortgage rates and incomes are pivotal factors influencing perceived overvaluation. Rising interest rates could potentially lead to a decrease in home prices, making current valuations appear inflated. Conversely, a rate drop might stimulate market demand and result in price hikes.

The Unpredictability of Market Peaks

Predicting the market peak is challenging, and concerns loom about buying at the wrong time. Ali Wolf, Chief Economist of Zonda, acknowledges the fear of buying at the peak but emphasizes the importance of considering long-term factors and objectives.

Future Outlook and Resilience of the Market

While acknowledging the possibility of price adjustments, experts generally don't foresee a housing crash akin to the Great Recession. The current market conditions, including demand exceeding supply, and tighter lending practices, are expected to cushion the market from a drastic downturn.

Despite the debates surrounding overvaluation, the decision to buy a home ultimately depends on personal circumstances, long-term goals, and financial readiness. Seeking advice from real estate professionals can provide valuable insights to guide this decision.

Thus, The debate over whether the housing market is overvalued underscores the complexity of the real estate landscape. Whether it's a bubble or a reflection of demand, it is advisable that individuals in need of a home should carefully weigh their options and make informed choices for their future.

Morgan Stanley Predicts Home Prices Will Drop Up to 5% in 2024

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In a recent analysis, Morgan Stanley has revealed that home prices could experience a significant drop of up to 5% in the coming year if mortgage rates remain at their current 8% level. The bank's strategists pointed to the recent surge in mortgage rates, with the average 30-year fixed rate reaching a two-decade high. This rise in rates has led to concerns about the impact on the housing market and affordability.

The surge in mortgage rates is the highest cost of borrowing that mortgage applicants have faced since the year 2000. This situation is expected to worsen affordability conditions over the short term. Mortgage rates at these levels could potentially lead to home prices remaining flat by the end of the year, according to Morgan Stanley's base-case forecast. However, if these high rates persist, it could have a more significant impact on demand and subsequently on home prices.

Morgan Stanley strategists suggest that even a 5% increase in housing inventory in the coming year could lead to a 5% drop in home prices by December 2024, provided there is no increase in sales. The rising mortgage rates in 2022 and 2023 had already sidelined many buyers and sellers from the housing market, leading to a shortage of available supply and driving up home prices. However, if high rates persist, they may reverse this trend.

The Shift in Morgan Stanley's Housing Market Predictions

Morgan Stanley analysts had previously expected national home prices to fall by 4% in 2023. This pessimistic forecast was made as the housing market faced challenges. However, in a recent research note, they made a significant change to their predictions, now suggesting that housing prices could rise by up to 5% for the year. This shift is attributed to the continuous rise in mortgage rates, which reached 8%, the highest level in over two decades.

The surge in mortgage rates, coupled with the record growth in home prices during the pandemic, has created an unaffordable housing market, unlike anything seen in decades. Affordability has declined significantly, with the monthly payment on a median-priced home increasing by 27% over the past year. If calculated using the current 8% rate, this increase jumps to 38%. The result is the most severe affordability deterioration seen in decades.

The housing market is already underbuilt, and the surge in mortgage rates has led to a retreat in supply. Existing home listings hit a new low in August, while homebuilder confidence has also taken a hit due to rising mortgage rates. This could result in fewer homes being built. However, the impact on home sales is expected to be less severe than in the previous year, although it will put upward pressure on home prices in the short term.

Other Financial Institutions' Predictions About Home Prices

Morgan Stanley isn't the only financial institution with predictions about home prices. Roger Ashworth, a managing director at Goldman Sachs, suggests that despite affordability challenges, the housing market is in a relatively strong position due to a low supply of homes for sale.

He predicts a slow but steady rise in home prices, with a 1.8% increase by the end of this year and a 3.5% increase by the end of 2024. Mark Fleming, chief economist at First American, also believes that 8% mortgage rates may continue or hover around that level throughout the end of this year.

Top Factors Contributing to the Pessimistic Housing Market Forecast for 2024

Rising Interest Rates

One of the key factors behind the pessimistic housing market forecast is the continuous increase in interest rates. The Federal Reserve has been raising its benchmark rate, affecting the cost of borrowing for mortgages and other loans. Higher interest rates make it more challenging for potential buyers to afford their monthly payments and reduce their purchasing power.

Tighter Lending Standards

Banks and other lenders have become more cautious about their lending practices, especially in the wake of the subprime mortgage crisis in 2008. They now require higher credit scores, larger down payments, and more documentation from borrowers. These stricter lending standards limit the pool of eligible buyers, making it more difficult for many to secure financing for a home.

Supply-Demand Imbalance

The housing market is currently grappling with a significant supply-demand imbalance. On one hand, there is a shortage of new construction, particularly in the affordable segment of the market. On the other hand, there is an excess of existing homes, particularly in the high-end segment. This imbalance results in a situation where buyers have fewer options, while sellers must lower their prices to attract buyers.

Economic Uncertainty

Economic uncertainty on a global scale is another factor contributing to the pessimistic forecast for the housing market. Factors such as trade tensions, geopolitical risks, and slowing economic growth create instability and unpredictability in financial markets. This, in turn, affects consumer confidence and spending. Uncertainty about income and job prospects may cause potential buyers to delay or cancel their plans to purchase a home.

Reference:

  • https://markets.businessinsider.com/news/stocks/housing-market-home-prices-drop-30-year-mortgage-rates-outlook-2023-10

Top 10 Housing Markets Where Homes Sold Fastest

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The U.S. housing market, despite some slowdown, remains a race for eager buyers keen on sealing property deals. A blend of soaring mortgage rates, historic lows in available homes, and determined buyers striving for homeownership has quickened homebuying across the nation.

The Rush to Beat the Competition

Nationally, the median home listing is spending 49 days on the market as of the first week of October, as per a comprehensive analysis by Realtor.com. This is only slightly less than the same period last year. However, specific regions are witnessing homes selling at a significantly accelerated pace compared to the previous year, where buyers lack the luxury of time, and sellers can expect swift transactions.

median days on market
Credits: Realtor.com

Eager Homebuyers in Diverse Markets

Realtor.com identified a mix of markets, spanning from the Northeast to the Southwest, where homes are changing hands swiftly. These include both affordable and high-priced markets, such as Buffalo, NY, and Oxnard, CA. Despite affordability challenges affecting demand, a pool of eager homebuyers is actively seeking opportunities despite the low inventory of available homes.

The Impact of Climbing Mortgage Rates

Climbing mortgage rates have stirred concerns among potential buyers and sellers. Despite this, appropriately priced homes in desirable locations continue to sell briskly. The uncertainty surrounding mortgage rates has urged buyers to act swiftly to secure homes and lock in rates before potential increases.

Top 10 Housing Markets Where Homes Were Selling Faster in 2023

1. Buffalo, NY: Leading the Speed Race

At the forefront of this trend is Buffalo, NY, where the median days on the market stand at 50. This represents a remarkable 13-day decrease from the previous year, indicating a surge in the housing market. Homebuyers in Buffalo are acting swiftly, fearing further rate hikes and aiming to secure a deal promptly.

Key Metrics for Buffalo, NY:

  • Median list price: $239,900
  • Median days on the market: 50
  • Year-over-year change in median days: 13 days faster

With home prices considerably below the national average and tight inventory, the Buffalo market is witnessing a significant rise in demand.

2. Phoenix, AZ: A Hotspot for Homebuyers

Phoenix, despite enduring scorching desert temperatures for a significant part of the year, remains a hotbed for homebuyers. The metro has witnessed accelerated home sales, with properties selling almost two weeks faster than the previous year. Factors like minimal natural disasters and a robust real estate market contribute to this demand.

Key Metrics for Phoenix, AZ:

  • Median list price: $475,000
  • Median days on the market: 78
  • Year-over-year change in median days: 13 days faster

Luxury homes are particularly in demand, selling faster than those below $1 million. Cash buyers dominate this segment, less affected by mortgage rate hikes, thereby keeping this part of the market active.

3. Oxnard, CA: Coastal Appeal and Rapid Sales

Situated along the Pacific coast, the Oxnard metro, including Thousand Oaks and Ventura, is known for its beautiful beaches and a thriving agricultural industry. Homes are selling swiftly, with a 7% increase in the median list price compared to the previous year.

Key Metrics for Oxnard, CA:

  • Median list price: $875,000
  • Median days on the market: 57
  • Year-over-year change in median days: 11 days faster

Despite the higher median prices, the appeal of this coastal region attracts buyers seeking waterfront views and a pleasant lifestyle.

4. Boise, ID: A Market Rebounding

Boise, Idaho, known for its outdoor recreation and favorable climate, saw a surge in demand during the COVID-19 pandemic as urban residents sought a change. While rising interest rates caused a temporary slowdown, the market has rebounded.

Key Metrics for Boise, ID:

  • Median list price: $519,900
  • Median days on the market: 72
  • Year-over-year change in median days: 9.5 days faster

The median home sale in this growing metro is almost 10 days faster than the previous year, reflecting a supply-demand imbalance and declining inventory, ultimately driving faster sales and rising prices.

5. Las Vegas, NV: Entertainment and Accelerated Sales

Las Vegas, a city known for its entertainment and low taxes, has long attracted retirees and individuals seeking an escape from harsh winters. Despite a history of real estate market fluctuations, Las Vegas is currently experiencing a surge in housing demand.

Key Metrics for Las Vegas, NV:

  • Median list price: $449,999
  • Median days on the market: 56
  • Year-over-year change in median days: 9 days faster

After the housing crash of 2008 and a slowdown due to rising interest rates in 2022, the market has rebounded. Homes are now selling about a week faster than the national median, reflecting renewed demand and improved market conditions.

6. Bridgeport, CT: Affluent Living and Swift Sales

The Bridgeport metro, located near New York City, is renowned for its affluent living and attractive real estate market. Despite higher median prices, homes in this area are selling over a week faster than the previous year, indicating sustained demand amidst limited supply.

Key Metrics for Bridgeport, CT:

  • Median list price: $795,000
  • Median days on the market: 74
  • Year-over-year change in median days: 8 days faster

Offering a mix of attractive properties, including four-bedroom homes, this metro remains appealing, especially with the rise of hybrid work models and increased flexibility.

7. Harrisburg, PA: Rapid Sales in Central Pennsylvania

Harrisburg, located in Central Pennsylvania, boasts the quickest average time-on-market among the listed places. The market here is fueled by limited inventory and high demand, resulting in homes being sold swiftly, attracting both buyers and sellers.

Key Metrics for Harrisburg, PA:

  • Median list price: $309,900
  • Median days on the market: 46
  • Year-over-year change in median days: 8 days faster

The record low number of homes for sale in Harrisburg has intensified competition among buyers, making it an opportune time for sellers to list their properties and facilitate quicker sales.

8. Springfield, MA: Historical Charm and Affordable Homes

Springfield, located along the Connecticut River, is a city steeped in history, known as the “Birthplace of Basketball.” With a rich industrial heritage and the influence of the Springfield Armory, this city offers attractive home prices, about 25% below the national average.

Key Metrics for Springfield, MA:

  • Median list price: $319,000
  • Median days on the market: 53
  • Year-over-year change in median days: 7 days faster

Despite rising mortgage rates, demand remains high due to these affordable home prices, making it an appealing option for potential buyers.

9. Cleveland, OH: Affordable Homes and Cultural Richness

Cleveland, situated against the southern shore of Lake Erie, is renowned for its affordability, making it the most budget-friendly metro on this list. The city offers a multitude of homes priced below $200,000, attracting a diverse range of buyers.

Key Metrics for Cleveland, OH:

  • Median list price: $199,000
  • Median days on the market: 48
  • Year-over-year change in median days: 6 days faster

The city's economic diversification and urban revitalization initiatives have bolstered demand, further fueled by the attractive pricing of properties.

10. Portland, ME: Coastal Charm and High Demand

Portland, known for its rugged coastline and vibrant food scene, attracts buyers seeking quality living in a picturesque setting. Despite prices approximately 25% higher than the national average, homes in Portland are selling faster than the previous year, indicating sustained demand.

Key Metrics for Portland, ME:

  • Median list price: $549,900
  • Median days on the market: 51
  • Year-over-year change in median days: 6 days faster

With a range of housing options, including waterfront properties, Portland offers a lifestyle that continues to entice both primary residence and vacation home buyers.

Looking Ahead

“Buyers are thinking, ‘I need to make an offer either the day a home goes on the market or soon after, so I can get my home and lock in a rate before it goes up,'” says Matthew Roland, assistant dean at the University of Buffalo’s Department of Urban and Regional Planning. He hopes for potential rate decreases to bolster inventory in the coming months.

Forbes’ Housing Market Predictions for 2024: What to Expect?

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Despite the improved mortgage rates compared to the previous fall, the housing market faced challenges last year with surging mortgage rates and record-level monthly payments. This created a perfect storm of unaffordability, particularly affecting first-time buyers.

As we navigate 2024, experts remain cautiously optimistic about the market's trajectory. In a detailed analysis by Forbes, the spotlight is placed on the challenges that have surfaced, including skyrocketing home prices and interest rates, triggering a potential cooling effect on housing market activity.

Housing Market Predictions for 2024

2024 Spring Home-Buying Season Outlook

The chief economist at Freddie Mac, Sam Khater, anticipates a busier spring home-buying season in 2024, although he acknowledges the steady pace of home price increases. However, some experts express concerns about tepid market activity throughout the year, attributing it to homeowners remaining “locked in” at low rates, impacting inventory and putting upward pressure on home prices.

Interest Rates and Federal Reserve's Role

The Federal Reserve's decision to keep the federal funds rate unchanged and hints at rate cuts in 2024 have implications for the housing market. Despite potential rate cuts, experts foresee persistent affordability challenges due to pent-up demand and low inventory, maintaining elevated home prices.

2024 Housing Market Conditions and Recovery Hopes

Mark Fleming, chief economist at First American Financial Corporation, predicts a “flat stretch” ahead, emphasizing the need for increased home inventories to ease pressure on prices. While some hope for a recovery, experts like Kuba Jewgieniew, CEO of Realty ONE Group, express optimism only if interest rates settle around 6% or lower.

Housing Inventory Challenges

The issue of low inventory persists, with many homeowners reluctant to sell due to low-interest rates or high home prices. Despite a slight uptick in builder outlook and building permits, entry-level supply remains a challenge, supporting sustained high home prices.

Market Crash Probability in 2024

Experts downplay the likelihood of a housing market crash in 2024, citing the record low supply of houses as a protective factor. Homeowners' secure footing, substantial home equity, and various economic factors contribute to a more stable market outlook, with expectations of modest home appreciation rather than a sharp decline.

Foreclosure Trends and Outlook

While foreclosure activity has increased nationally, experts don't anticipate a wave of foreclosures in 2024. Factors such as a robust economy, low unemployment, and steady wage growth, coupled with substantial homeowner equity, contribute to the reduction of foreclosure risks despite the phasing out of Covid-era mortgage relief programs.

Optimal Timing for Home Purchase

Timing the housing market remains challenging, with experts emphasizing the personal nature of the decision. Despite the uncertainties, prospective buyers are encouraged to focus on finding a home that meets their needs and is affordable, rather than waiting for potentially better market conditions. Building equity and net worth through homeownership is deemed a worthwhile endeavor.

Optimistic Signs for Home Affordability in 2024

The optimism surrounding home affordability in 2024 gains momentum as mortgage rates recede. With the average 30-year fixed mortgage rate decreasing by more than a full percentage point from its 2023 high of 7.79%, prospective homeowners are hopeful that this trend will continue, providing relief in the midst of the affordability crunch.

The decline in mortgage rates has tangible effects on monthly payments, offering a 14% reduction from their record highs in October. According to Redfin, the median payment in December dropped to $2,361, marking a positive shift and potentially easing the burden on homebuyers. This comes as a welcome development after experiencing the least affordable year on record for home buyers.

Consumer optimism regarding mortgage rates is reflected in the latest Fannie Mae Home Purchase Sentiment Index (HPSI). A survey-high 31% of consumers express the expectation that mortgage rates will continue to decline. This positive sentiment indicates a collective belief in the potential for more favorable conditions in the housing market.

While the overall outlook on home affordability remains cautious, there are signs of emerging optimism. According to December data, 17% of consumers indicate that now is a good time to purchase a home, representing an increase from the previous month's survey record low of 14%. This shift in sentiment suggests a tentative but noteworthy shift in consumer perception.

Forbes' housing market predictions for 2024 suggest a nuanced landscape, with challenges and opportunities. As the market grapples with affordability issues, potential recoveries hinge on factors like interest rates, inventory increases, and economic stability. Prospective homebuyers are advised to navigate the market thoughtfully, considering their unique circumstances in this dynamic real estate environment.

Homebuyers Are Moving to Sacramento, Las Vegas, and Orlando

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Homebuyers across the United States are changing their preferences as the housing market undergoes significant shifts. Austin, once a sought-after destination, is witnessing an exodus due to soaring housing costs. At the same time, Sacramento, Las Vegas, and Orlando are emerging as the most popular choices for homebuyers, despite the increasing climate risks they face.

In a surprising turn of events, more homebuyers are looking to leave Austin, Texas, than move in during the third quarter of 2023. This marks the first time on record that there hasn't been a net inflow into the Texas capital. The rising housing costs in Austin have prompted some recent transplants to reconsider their decisions and return to their hometowns.

The data analyzed for this report is based on the searches of approximately two million users on Redfin, who viewed homes for sale online across over 100 metropolitan areas from July 2023 to September 2023. Redfin's records trace housing trends dating back to 2017.

U.S. Homebuyers' Nationwide Relocation

Nationwide, there is a significant trend of homebuyers relocating to different metro areas, which is still near record highs. During the third quarter, approximately 25.9% of homebuyers sought to move to a different part of the country. This figure remains relatively consistent with the record high of 26% observed in August. It's also up from 24% compared to the previous year and a substantial increase from the 19% reported before the pandemic.

Notably, there is a 9% decrease in Redfin.com users looking to move away from their home metro compared to the previous year, marking the most significant annual drop on record. However, searches for out-of-town homes are holding up better, with a 17% decrease in Redfin.com users searching within their home metro compared to a year ago.

Despite a cooling overall housing market, the high percentage of homebuyers looking to move to a different metro area continues, largely due to the pursuit of affordability. In fact, nine out of the top 10 most popular migration destinations offer lower home prices than the most common origin of buyers moving in.

Homebuyers' Migration to Affordable yet Climate-Risky Destinations

Sacramento, California, Las Vegas, Nevada, and Orlando, Florida, have emerged as the most sought-after destinations for relocating homebuyers in the third quarter of 2023. The popularity is determined by a net inflow, which measures how many more Redfin.com users looked to move into an area rather than leave it.

Remarkably, half of the top 10 popular destinations are in Florida, and eight of them are situated on the East Coast, even though the two most popular destinations are in the western part of the U.S. What's fascinating is that nearly all the places homebuyers are moving to are more affordable than their places of origin, which explains their popularity, even in the face of increasing climate risks.

Top 10 Metros Homebuyers Are Moving Into, by Net Inflow

Let's take a closer look at the top 10 metro areas that homebuyers are flocking to, based on net inflow, in the third quarter of 2023:

  1. Sacramento, CA: With a net inflow of 4,800, Sacramento takes the top spot, attracting homebuyers primarily from San Francisco, CA, and Chicago, IL.
  2. Las Vegas, NV: Las Vegas follows closely with a net inflow of 4,500, drawing homebuyers primarily from Los Angeles, CA, and retaining a strong local presence.
  3. Orlando, FL: Orlando secures the third position with a net inflow of 4,000, primarily from New York, NY.
  4. Myrtle Beach, SC: With a net inflow of 3,800, Myrtle Beach entices homebuyers from Washington, D.C., and maintains its local appeal.
  5. North Port-Sarasota, FL: This destination reports a net inflow of 3,700, with most homebuyers coming from New York, NY.
  6. Portland, ME: Portland, ME, attracts homebuyers with a net inflow of 3,500, primarily from Boston, MA.
  7. Tampa, FL: Tampa, FL, showcases a net inflow of 3,400, with New York, NY, as its primary source of homebuyers.
  8. Cape Coral, FL: Cape Coral, FL, with a net inflow of 3,300, draws homebuyers primarily from Chicago, IL.
  9. Miami, FL: Miami, FL, reports a net inflow of 3,200, with New York, NY, as its primary source of homebuyers.
  10. Salisbury, MD: Salisbury, MD, rounds out the top 10 with a net inflow of 3,100, primarily attracting homebuyers from Washington, D.C.

In summary, the U.S. housing market is undergoing a transformation as homebuyers seek new opportunities and prioritize affordability. Austin, once a bustling destination, is witnessing a surprising exodus due to escalating housing costs. In contrast, Sacramento, Las Vegas, and Orlando are experiencing a surge in popularity, despite the climate risks they face.

These trends are reflective of a changing landscape, where Americans are making calculated moves to secure their dream homes in the most promising locations. These shifts provide valuable insights into the evolving housing market, allowing both homebuyers and sellers to navigate the changing tide with confidence.

Homebuyers Are Leaving San Francisco, New York, and Los Angeles

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According to Redfin, an increasing number of homebuyers are bidding farewell to the bustling streets of San Francisco, New York, and Los Angeles in pursuit of more affordable dwellings. The trend of US migration patterns reveals a significant net outflow, indicating that more Redfin.com users are looking to leave these metros than to move in.

The allure of the coastal job centers has been waning, with the high cost of living driving residents to seek greener pastures. In the quest for more affordable places to call home, prospective buyers are turning their backs on these traditionally sought-after locations. Ironically, the most common destinations for these migrating homebuyers often boast pricier homes than the places they're leaving behind.

Homebuyers Flock to Affordable Metros for Housing

San Francisco, a city famous for its iconic Golden Gate Bridge and thriving tech scene, leads the exodus with a net outflow of 25,800 users in Q3 2023, compared to 37,700 in the same period last year. This 24% net outflow means that nearly a quarter of Redfin.com home searchers in the city are looking to leave. The top destination for these San Francisco escapees is Sacramento, California, with Seattle, Washington, being the favored out-of-state destination.

New York, the city that never sleeps, is witnessing a similar trend with 25,300 users departing in Q3 2023, up from 23,500 the previous year. A whopping 30% of home searchers in the Big Apple are looking elsewhere. Miami, Florida, emerges as the top destination for these New Yorkers, both in-state and out-of-state.

Los Angeles, often seen as the epitome of the California dream, has also seen a substantial exodus. In Q3 2023, 20,200 users left the City of Angels, compared to 33,500 in the same period last year. This translates to a 19% net outflow, and Las Vegas, Nevada, is the top destination for these departing residents, both from within California and out-of-state.

The Nationwide Trends: US Migration Patterns by Numbers

The US migration patterns don't stop at these three major cities. The appeal of more affordable housing options is drawing in residents from other major metros across the country. In Washington, D.C., 13,900 residents left in Q3 2023, up from 18,800 the previous year. Salisbury, Maryland, emerges as the preferred destination for these departing Washingtonians.

Chicago, often called the Windy City, has witnessed 4,800 residents leaving in Q3 2023, up from 5,600 the previous year. Milwaukee, Wisconsin, is the preferred destination for these Chicagoans, offering more budget-friendly housing options.

Boston, Massachusetts, another expensive urban center, saw 4,300 residents departing in Q3 2023, up from 9,300 the previous year. Portland, Maine, beckons these departing Bostonians with its charm and affordability.

Farther east, Hartford, Connecticut, saw 3,300 residents leaving in Q3 2023, a substantial increase from 900 in the same period the previous year. Boston, Massachusetts, once again becomes the top destination for these migrating homeowners.

In Denver, Colorado, 2,200 residents left in Q3 2023, up from 3,700 the previous year. Chicago, Illinois, is the preferred destination for these Denver escapees, offering a change of scenery along with cost savings.

Even Detroit, Michigan, is part of this migration pattern, with 2,000 residents leaving in Q3 2023, up from 4,500 the previous year. Grand Rapids, Michigan, and Cape Coral, Florida, are the top destinations for these departing Detroiters.

Lastly, San Diego, California, saw 1,800 residents leaving in Q3 2023, but interestingly, there was an inflow of 6,900 residents during the same period. Las Vegas, Nevada, remains a popular destination for both departing and incoming San Diegans.

Insightful Analysis US Migration Pattern

This migration trend is based on a comprehensive analysis by Redfin, involving approximately two million Redfin.com users who browsed for sale homes online across more than 100 metro areas from July 2023 to September 2023. To gauge the share of homebuyers looking to relocate from one metro to another, Redfin calculates the portion of overall home searchers that are migrants.

This migration pattern indicates a shift in priorities for homebuyers across the United States. The quest for affordability is driving them to seek new horizons and explore housing markets that offer greater value for their investment. Whether it's the allure of Sacramento's thriving community, Miami's vibrant culture, or the charm of Portland, Maine, these migrating homebuyers are reshaping the landscape of American housing markets.

Summary: The US migration patterns are reshaping the housing market landscape, with homebuyers leaving expensive coastal metros in favor of more affordable places. Redfin's analysis reveals the extent of this phenomenon, with cities like San Francisco, New York, and Los Angeles experiencing substantial net outflows of residents seeking greener pastures.

As the quest for affordability continues to drive these migration patterns, it's clear that the American dream of homeownership is being redefined. Whether it's the allure of Sacramento's thriving community, the vibrant culture of Miami, or the charm of Portland, Maine, these migrating homebuyers are changing the face of the housing market in the United States.

Source:

  • https://www.redfin.com/news/housing-migration-trends-q3-2023/

Fannie Mae Improves its Housing Market Predictions for 2023

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Fannie Mae Improves its Housing Market Predictions for 2023

The 2023 housing market predictions by Fannie Mae provide a glimpse into a market navigating through challenging waters. Despite the hurdles posed by soaring mortgage rates, the housing market has demonstrated resilience. However, caution is essential as we move into 2024, with expectations of a slowdown.

Factors Influencing the Housing Market

The housing market is influenced by various factors, and the fluctuation in mortgage rates is a significant contributor. As mortgage rates surge past 7%, they are expected to impact the housing market in 2023 and beyond. Affordability constraints are becoming more pronounced, making it challenging for potential buyers to enter the market.

Fannie Mae's Economic and Strategic Research Group anticipates that the higher mortgage rate environment will dampen housing activity, complicating affordability into 2024. This situation is a result of a substantial surge in housing activity experienced in the years between mid-2020 and mid-2022, with much of that momentum now being reined in.

Challenges and Resilience in the Housing Market

The resilience of house prices, despite the challenges posed by higher mortgage rates and affordability issues, showcases the underlying strength of the housing market. This unexpected resilience might be attributed to a combination of demand-supply dynamics, economic policies, and evolving consumer preferences.

However, experts caution that this resilience may face a test as the mortgage rates continue to rise. The slowdown in the housing market anticipated in 2024 underscores the need for potential buyers to carefully assess their options and plan their investments.

The Federal Reserve's Role and Economic Outlook

The Federal Reserve plays a pivotal role in shaping the economic landscape. The recent swift rise in interest rates has drawn attention to the Federal Reserve's stance on rate hikes. They have conveyed a commitment to keeping rates “higher for longer” until annual inflation stabilizes at 2%. This strategy is aimed at managing inflation and ensuring economic stability.

However, this approach also comes with potential economic dislocations, as witnessed in the past with similar interest rate hikes. Economists, including Doug Duncan from Fannie Mae, anticipate a mild economic downturn in the first half of 2024 due to the abrupt rise in interest rates.

Impact on Consumer Behavior

The 7% mortgage rates are expected to have a profound impact on consumer behavior. As interest rates continue to rise, consumer consumption and business investments may slow down due to increased debt costs. This could lead to a decrease in home sales as potential buyers may reconsider their purchase decisions in light of higher borrowing costs.

Fannie Mae's research group points out that the recent rapid rise in interest rates can potentially lead to economic dislocations, even though the consumer has shown resilience. The rate hike has brought to the forefront the importance of careful economic management to ensure a smooth transition.

Long-Term Housing Market Forecast and Economic Stability

The long-term forecast for the housing market depends on various factors, including how the Federal Reserve manages interest rates and inflation. While there may be short-term challenges, experts believe in the potential for the economy to stabilize in the long run. The Federal Reserve's commitment to a “soft landing” indicates its determination to manage the economy and prevent sharp economic downturns.

However, achieving this requires a delicate balance and effective policy implementation to mitigate the impact of rising rates on the housing market and the broader economy.

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