As we step into 2024, housing market enthusiasts eagerly await Zillow's annual predictions for the hottest housing markets. Zillow's analysis considers various factors, including expected home value growth, projected changes in owner-occupied households, and job growth compared to new construction. Let's delve into the insights provided for 2024.
Which Are the Hottest Housing Markets in 2024?
1. Buffalo, NY (Average home price: $248,445)
2. Cincinnati ($270,826)
3. Columbus, OH ($301,138)
4. Indianapolis ($268,125)
5. Providence, RI ($455,609)
6. Atlanta ($373,212)
7. Charlotte, NC ($371,844)
8. Cleveland ($215,597)
9. Orlando, FL ($388,048)
10. Tampa, FL ($375,338)
Zillow's crystal ball indicates that Buffalo, New York will claim the throne as the nation's hottest housing market in 2024. This revelation comes amidst a backdrop of challenges such as low inventory and relatively high mortgage rates and prices.
Joining Buffalo in the top five are Cincinnati, Columbus, Ohio, Indianapolis, and Providence, R.I. What sets these markets apart?
Economic Fundamentals and Regional Trends
The Midwest, Great Lakes, and South emerge as the epicenter of 2024's hottest markets.
Cities like Cincinnati, Columbus, and Indianapolis lead the pack due to solid economic fundamentals, fast-moving housing inventory, and expectations for stable home values.
Last year's hotshot, Charlotte, maintains its prominence with a modest increase in home values.
Zillow’s Methodology Unveiled
Zillow's list is meticulously curated based on an analysis that encompasses forecast home value growth, recent housing market velocity, and projected changes in the labor market, home construction activity, and the number of homeowner households. The intricate details behind Buffalo's ascent include job creation outpacing new home construction projects and expectations for steady home values.
Factors Propelling Markets to the Top
Let's dissect the key factors propelling these markets to the zenith of Zillow's predictions:
1. Price Growth
In 2023, home value growth experienced a slowdown, primarily fueled by the highest mortgage interest rates since 2008. Projections for 2024 reveal that only 15 of the 50 largest markets are expected to see home values grow. Notably, Charlotte is expected to maintain steady growth, while Buffalo's typical home value might see a marginal decline.
2. Inventory & Velocity
The inflow of new listings in 2023 witnessed a significant slowdown, maintaining for-sale inventory at multi-year lows. Markets with the fewest listing days per home in 2023, like Hartford, Cincinnati, and Columbus, are likely to continue experiencing high demand relative to supply in 2024.
3. Demographics
Baby boomers and millennials, two powerhouse generations, continue to shape the housing market. In 2024, only 14 of the 50 largest markets are expected to see homeownership rise. Columbus leads with a trend suggesting the formation of 11.4% more owning households, while other markets face negative demographic pressure, notably Birmingham, San Diego, and Oklahoma City.
The Coolest Metro Areas of 2024
Not all markets bask in the warmth of success. Zillow's projections also highlight the coolest metro areas of 2024, characterized by expected annual home value declines and a decrease in owner-occupied households.
New Orleans, San Antonio, Denver, Houston, and Minneapolis find themselves in this category, each facing unique challenges.
As we navigate the intricate landscape of the housing market in 2024, Zillow's predictions serve as a compass, guiding us through the nuances of economic trends, demographic shifts, and the delicate dance between supply and demand. Whether you're a prospective homebuyer or a keen observer, staying informed about these forecasts will undoubtedly provide valuable insights into the dynamic world of real estate.
