It's wild how quickly things can change, especially in the world of real estate. Just when Toledo, Ohio, was basking in the glow of being named the hottest housing market in the U.S. for 2024 by Realtor.com, their 2025 forecast has dropped it to 39th position. This huge shift raises a lot of questions. What happened? Is Toledo still a good place to invest? Let's dig deep and unpack the reasons behind this dramatic change in fortunes, and what it means for potential buyers and sellers.
Toledo Was the Hottest Housing Market in 2024, But Not in 2025
Toledo's 2024 Triumph: A Closer Look
Back in 2024, Toledo was the belle of the ball. It wasn't just some fluke, either. Several factors combined to make it a super attractive option.
- Affordability was Key: Compared to the national average, Toledo had (and still has) a significantly lower median home price. This made it a haven for those priced out of other markets. It’s a basic concept, but when you have a lot of people looking for homes and not a lot of homes available, prices are bound to rise. Toledo still had relatively lower home prices compared to other areas.
- Job Market Diversity: Toledo wasn't just a cheap place to live; it also offered solid job opportunities in diverse sectors, including manufacturing, healthcare, education, and government. This provided a safety net for people who were thinking about moving into the region.
- Lifestyle and Community: Beyond the numbers, Toledo offered a vibrant and close-knit community, cultural amenities, and beautiful parks. The Toledo Zoo and the Maumee River added to the charm. It wasn’t just about numbers on a spreadsheet; the city had a soul.
These factors combined to create a perfect storm of demand, driving up sales and prices. Realtor.com projected a 14.0% year-over-year increase in existing home sales for 2024, which is pretty remarkable, especially when you consider it was 5.2% above the average of pre-pandemic years (2017-2019). Toledo was also expected to see an 8.3% rise in the median sale price of existing homes—a whopping 43.4% above the 2017-2019 average.
The 2025 Shift: Why Toledo Lost Its Crown
So, what caused this dramatic change? Why did Toledo drop to 39th place on the Realtor.com list for 2025? The answer lies in the changing dynamics of the national real estate market and some specific regional trends. Here’s what I've pieced together:
- The Sun Belt is Booming: The Realtor.com 2025 forecast clearly shows a major shift of focus towards the South and West. The top 10 markets are almost entirely concentrated in these regions, and this isn’t by accident. This is where new development and economic growth are heavily concentrated. I feel that these regions are generally seeing a surge in popularity due to a combination of factors like warmer weather, job growth, and more new development, drawing people in.
- Inventory is the King: One of the biggest factors driving the hot markets is available housing inventory. Markets in the South and West are generally experiencing more abundant inventory which is helped by the large amount of new construction projects. The Midwest, and in particular Toledo, is slower to see any improvement in inventory. The data shows that the South and West are closer to pre-pandemic inventory levels. The Midwest and Northeast are still lagging behind. I personally believe that more houses mean more choices and more buyers that can enter the market.
- Younger Populations with Military and International Connections: Many of the top markets are seeing a surge in growth thanks to younger families with military and international connections. They're also areas with a higher proportion of government-backed loans like VA and FHA mortgages. I've noticed these types of loans are often beneficial to first time home buyers.
- Mortgage Rate Insensitivity: Several top markets also have a high proportion of homeowners who own their homes outright without a mortgage. This makes them less sensitive to fluctuations in mortgage rates and ensures a stable market for buyers.
- Flexible Work Arrangements: The top markets are also attracting remote workers and the demand created by these new workers is helping to fuel their respective housing markets. This trend is especially beneficial to lower cost cities as remote workers are willing to relocate to places with lower cost of living.
Toledo's Position: A Detailed Look
Let’s be clear, being 39th isn't terrible, it just isn't the hottest market anymore. Here's how Toledo stacks up in the Realtor.com 2025 forecast:
Metric | 2025 Forecast |
---|---|
Existing Home Sales Year-over-Year | 10.8% |
Existing Home Sales vs. 2017-19 Average | -5.0% |
Median Sale Price Year-over-Year | 6.7% |
Median Sale Price vs. 2017-19 Average | 51.2% |
Combined Sales and Price Growth | 17.5% |
Key Takeaways From the Data
- Sales Growth is Still Decent: While not the explosive growth seen in 2024, a 10.8% year-over-year increase in home sales shows that Toledo’s market is still growing. I still believe that any growth in sales is a good thing.
- Lagging Behind Pre-Pandemic Sales: The -5.0% figure compared to the 2017-19 average is significant. It indicates that while sales are going up, they are not fully recovered to pre-pandemic levels. This could be due to a variety of factors, and I believe a main factor is low inventory of homes in Toledo.
- Price Growth is Moderate: A 6.7% year-over-year increase in median sale price is still good, but not at the level that would make it a top market. Toledo is still affordable, and that’s a major draw for a lot of buyers. However, compared to the dramatic increase of 43.4% in 2024 (compared to 2017-2019), the pace of appreciation has slowed down considerably.
- Combined Growth is Good, But Not Top Tier: Toledo's combined growth of 17.5% is a good number, but it’s not enough to compete with the South and West's dominant performance.
My Personal Take: Is Toledo Still a Good Option?
Here's my honest opinion: Despite the drop in rankings, I still think Toledo offers a lot of potential, especially for certain types of buyers.
- First-Time Homebuyers: If you're looking for an affordable place to start building equity, Toledo is still a great option. The relative affordability, coupled with diverse job options, make it a wise choice.
- Buyers Looking for a Slower Pace of Life: If you're tired of the hustle and bustle of major cities, Toledo offers a more relaxed pace without sacrificing cultural amenities.
- Value-Oriented Investors: If you are an investor looking for a market with good potential for appreciation at an affordable price, Toledo should still be on your radar. The current data shows potential for growth, so it can still be a great market for the right type of investor.
However, if you're looking for a market with explosive growth, Toledo may not be the ideal choice in 2025. The markets in the South and West are likely to offer better appreciation potential in the short term. I would always recommend doing your own due diligence and seeing which area best suits your personal needs and financial goals.
What to Expect in Toledo's Market Moving Forward?
Here's what I think will happen in Toledo's market based on these findings:
- Steady Growth: While not as dramatic as 2024, I believe Toledo will continue to see slow and steady growth in both sales and prices.
- Inventory Will Remain a Challenge: I feel that one of the most important metrics to pay attention to is the available housing inventory. It is still likely to lag behind the national average. If the availability of houses improves, then Toledo can become more competitive in the national market.
- Affordability will Remain a Key Draw: With a still relatively lower cost of living than most other areas in the country, Toledo will be a major draw for people looking to relocate.
- Competition will be Stronger: While there might be less pressure compared to 2024, competition for desirable homes will likely remain strong.
Conclusion
The shift in Toledo's ranking from the hottest market in 2024 to 39th in 2025 is a great example of how dynamic real estate is. While Toledo may not be experiencing the explosive growth predicted last year, it's still a solid market with potential for steady growth and affordability. It’s important to look past the hype and understand the underlying factors that are driving the market. For some buyers, Toledo might just be the perfect fit. I always say, it is critical to understand what your own personal needs and financial goals are so you can make the right choice for yourself.
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