The housing market’s current stagnation is predicted to continue into 2024. However, a recently published forecast by Realtor.com has identified several metro areas that are expected to experience both increasing prices and sales next year. Leading the way is Toledo, Ohio.
Promising Housing Markets in 2024
According to Realtor.com’s analysis, the top housing markets in 2024 are primarily located in the Northeast, Midwest, and California. The real estate listings site calculated changes in home prices and sales volume across various locations in the United States. By combining these forecasts, they were able to pinpoint the places among the 100 largest metros where both prices and sales are projected to experience the most significant growth. (Realtor.com is owned by News Corp, the parent company of Move, which operates Realtor.com and Move.com).
Top Five Markets
The top five housing markets for 2024 are as follows:
- Toledo, Ohio: Existing-home prices are anticipated to rise by 8.3% from the previous year, with sales expected to climb by 14%, resulting in a combined growth rate of 22.3%.
- Oxnard, California: Prices and sales are projected to increase by 3.3% and 18%, respectively.
- Rochester, New York: Prices will rise by 10.4%, while sales are forecasted to grow by 6.2%.
- San Diego, California
- Riverside, California
Additional markets expected to perform well include Bakersfield, California; Springfield and Worcester in Massachusetts; Grand Rapids, Michigan; and Los Angeles.
It is important to note that these exceptional markets should be considered anomalies within the larger trend. Realtor.com recently indicated that it anticipates flat U.S. existing-home sales volume for next year, accompanied by a 1.7% decrease in prices. This is primarily due to limited inventory, resulting in higher price growth but fewer overall sales in larger metropolitan areas.
Factors Driving Growth
The identified top markets in the Midwest and Northeast are known for being more affordable, and their economies are heavily dependent on sectors expected to experience growth in 2024, such as education, healthcare, and manufacturing. Generally, areas with strong employment rates tend to fuel home sales.
To summarize, while the housing market overall is expected to remain stagnant in 2024, there are several metro areas that stand out as promising for both rising prices and sales. These markets are predominantly located in the Northeast, Midwest, and California and are characterized by more affordability and robust employment opportunities in key sectors.
Top Housing Markets in Southern California Expected to Outperform the State
According to Realtor.com, five out of the top 10 metro areas with the strongest housing markets are located in southern California. These areas are projected to perform better than the rest of the state. The average sales growth forecast for these markets is an impressive 13.1%. In contrast, other areas in California that make up the report’s top 100 list are expected to see a decline of 4.1%.
Factors Driving Sales Growth and Price Gains
The report highlights two key trends that will drive the significant sales growth and price gains in these top housing markets. Firstly, in relatively affordable markets, buyers are actively searching for lower housing costs, which is expected to stimulate sales. Secondly, in expensive markets that were heavily impacted by rising mortgage rates in 2022 and 2023, lower rates in the coming year are anticipated to spark a rebound in sales.
Realtor.com’s chief economist, Danielle Hale, explains, “Home buyers are still looking for markets where they can capitalize on lower prices. Even in some of the more expensive markets, we’ll see double-digit sales growth as sales start to rebound from their historic lows, helped by mortgage rates which are expected to finally relent.”
Outlook for 2023
However, not all housing markets are expected to experience a rebound in 2023. The report predicts that prices and sales will decline the most in Austin, Baton Rouge, L.A., and Portland, Ore.
These expectations for 2023 build upon the shifting price trends witnessed this year. The Federal Housing Finance Agency’s data reveals that prices have risen the most in New England and the East North Central census division during the first three quarters of this year. This division includes states like Wisconsin, Illinois, Indiana, Ohio, and Michigan. In 2022, prices had seen the most significant gains in the South Atlantic and Mountain regions during the same time period.