Lafayette-West Lafayette, Ind., remains the No. 1 emerging market in America.
NEW YORK and SANTA CLARA, Calif., July 26, 2023 (GLOBE NEWSWIRE) -- The Wall Street Journal and Realtor.com® today released the WSJ/Realtor.com® Summer 2023 Emerging Housing Markets Index, which revealed Lafayette-West Lafayette, Ind., remains the No. 1 emerging market in America. The index analyzes key housing market data, as well as economic vitality and lifestyle metrics, to surface emerging housing markets that offer a high quality of life and are expected to see future home price appreciation. Markets offering lower-cost living, strong employment and convenient commutes performed best as the sustained demand for homes and a quick market pace of sales continues to be the industry standard.
The Top 20 Emerging Markets for Summer 2023 are:
- Lafayette-West Lafayette, Ind.
- Fort Wayne, Ind.
- Elkhart-Goshen, Ind.
- Bloomington, Ill.
- Sioux City, Iowa-Neb.-S.D.
- Columbus, Ohio
- Topeka, Kan.
- Johnson City, Tenn.
- South Bend-Mishawaka, Ind.-Mich.
- Kingsport-Bristol-Bristol, Tenn.-Va.
- Manchester-Nashua, N.H.
- Knoxville, Tenn.
- Columbia, Mo.
- La Crosse-Onalaska, Wisc.-Minn.
- Portland-South Portland, Maine
- Akron, Ohio
- Oshkosh-Neenah, Wisc.
- Jefferson City, Mo.
- Lebanon, Penn.
- Omaha-Council Bluffs, Neb.-Iowa
- Springfield, Ill.
- Janesville-Beloit, Wisc.
- Springfield, Ohio
- Hickory-Lenoir-Morganton, N.C.
- Burlington, N.C.
- Waterloo-Cedar Falls, Ind.
Key Trends Among the Summer 2023 Top 20 Emerging Housing Markets:
Emerging Markets Offer Lower-Cost Living
Home prices have begun to ease nationally, falling 0.9% in June. However, the cost of purchasing a home continues to strain many buyers. Similar to previous quarters, Summer 2023’s emerging markets continue to lean heavily on affordability. Home list prices in all but four of the top 20 markets are lower than the median-priced U.S. home for sale, which was $445,000 in June. The lowest-priced locale on the list, Akron, Ohio, offered 49% savings on the median priced home relative to the national level in June.
Sustained Demand Drives High Price Growth, Quick Market Pace
The median price of the typical home for sale is just slightly lower than last June. While the national market has slowed, this quarter’s emerging markets have continued to attract attention due to their affordability and desirability, which has kept price growth strong. The average increase in listing price was 25% among the top 20 markets compared to 8.9% nationally for the 12 months ending in June 2023. High demand led to less active inventory build up than was typical in the US. The average increase in homes for sale across the top 20 markets was 16% compared to roughly 40% nationwide compared to the prior year.
Mid-sized Markets with Strong Employment and Convenient Commutes
Similar to last quarter, this quarter’s emerging markets are smaller - the average population of these markets is roughly half that of the 300-market average. The largest on the list is Columbus, Ohio, with a population just over two million, followed by Milwaukee, Wis., which has roughly 1.5 million residents. Knoxville, Tenn., Akron, Ohio, and Portland, Maine, each have over half a million residents, but the other 15 markets on the list all fall well below this population level.
The job market has remained near recent unemployment lows, notching 3.6% unemployment in June. Remarkably, the emerging markets have even better employment trends, with an average unemployment rate of just 2.9% in May. Only three of the top 20 markets had an unemployment rate above the 300-market average (3.5%).
City Spotlight: Columbus, Ohio
While many of the last quarter’s top-ranking metros stayed near the top, Columbus, Ohio, moved up to become the sixth emerging market. Columbus offers home shoppers the amenities of a larger town, but at a lower price point. Home to The Ohio State University, residents of this area can enjoy top-notch college sports, the exciting Short North Arts District and a bustling food scene.
The typical home for sale in Columbus was listed for $399,000 in June, a 10% discount compared to the national median. Homes spent 23 days on the market in June, almost 50% longer than last year, but still notably faster than the typical U.S. market. More than half of views to properties in Columbus come from outside of the metro, with particularly sizable out-of-metro attention from the New York City area.
Returning Markets
There are many familiar places on the list of the top 20 emerging markets: 12 of the spring 2023 list, most notably Lafayette-West Lafayette, Ind. Lafayette-West Lafayette has held the top spot for three consecutive quarters. Among the markets that have remained on our list are the ever-popular southern locales Johnson City and Knoxville, Tenn., as well as the midwestern hotspot of Columbus, Ohio, and various small- to mid-sized midwestern cities that offer affordable housing and low costs of living. Notably, the popular and fast-moving northeastern metro of Manchester-Nashua, N.H., also remained on the list, continuing the reign of Boston metro area locales.
Markets Falling Out of the Top 20
Of the eight markets that fell off of the top 20, most also fell out of the top 50. The two biggest movers, Burlington, N.C., and Omaha-Council Bluffs, Neb.-Iowa, which fell 79 spots and 151 spots, respectively, remained near the top half of areas studied, ranking 96th and 159th this quarter. The markets that departed the top 20 in our index included two Southern markets of Hickory-Lenoir-Morganton and Burlington, N.C., as well as Lebanon, Pa., and the midwestern markets of Springfield, Ill., Waterloo-Cedar Falls, Iowa, Janesville-Beloit, Wis., Springfield, Ohio, and Omaha-Council Bluffs, Neb.-Iowa. As buyers adjusted to the higher-rate environment, these markets were replaced by slightly higher priced markets.
Methodology
The ranking evaluates the 300 most populous core-based statistical areas, as measured by the U.S. Census Bureau, and defined by March 2020 delineation standards for eight indicators across two broad categories: real estate market (50%) and economic health and quality of life (50%). Each market is ranked on a scale of 0 to 100 according to the category indicators, and the overall index is based on the weighted sum of these rankings. The real estate market category indicators are: real estate demand (16.6%), based on average pageviews per property; real estate supply (16.6%), based on median days on market for real estate listings, median listing price trend (16.6%). The economic and quality of life category indicators are: unemployment (6.25%); wages (6.251%); regional price parities (6.25%); the share of foreign born (6.25%); small businesses (6.25%); amenities (6.25%), measured as the average number of “everyday splurge”-type stores per capita in an area; commute (6.25%); and estimated effective real estate taxes (6.25%).
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Media Contacts:
For The Wall Street Journal
Wister Hitt
wister.hitt@dowjones.com
For Realtor.com®
Sara Wiskerchen
press@realtor.com
