Introduction: hottest real estate markets
Both buyers and sellers may expect a flurry of activity in the home market this year. These main hot housing markets reflect the general patterns that served as the foundation for the national forecast.
The Mountain West, Midwest, and housing regions outside of the Boston area are at the top of their list of the hottest real estate markets in 2022. Local economies in these markets are booming, with low unemployment rates. They’ve also seen tremendous job growth since last year. Many buyers searching for real estate in these areas come from tech centers, where real estate is considerably more competitive, pricey, and often seems out of reach.
The current hottest market in America
Concord’s attractiveness may be perplexing at first. The median listing price in New Hampshire’s state capital is high—$457,000—compared to the new national average of $450,000 (up 16.9% from the previous year).
Despite this, Concord’s house prices are around $20,000 lower than the city it replaced for the hottest market title—Manchester, NH, which held the top position for nine of the previous 12 months.
Previously, homebuyers were lured to Manchester because of the adjacent Boston metro’s high median house prices, which reached $759,000 in June.
However, with Manchester property prices reaching $478,000, cash-strapped purchasers are looking for more inexpensive options nearby. Concord, like Manchester, is within driving distance (approximately an hour) of Boston. Furthermore, house sellers who profited from Manchester’s hot streak need a place to live.
In-state sellers are migrating, according to real estate broker Pamela Young of Re/Max Insight, who sells houses in both Concord and Manchester. Concord is located north of Manchester and has lower pricing. You get more dwellings for less money.
Young also claims that purchasers from Tennessee, Georgia, Texas, Oklahoma, and Hawaii are coming to New Hampshire. Furthermore, both Manchester and Concord benefit from the absence of state income and sales taxes in the Live Free or Die state. Still, these New Hampshire purchasers will need to act quickly, especially in Concord.
Why Western real estate markets are cooling
Indeed, California’s fall from favor may seem abrupt, considering that the Golden State had five metros among the top 20 warmest markets in January. (Metros include the center city as well as the surrounding suburbs, towns, and smaller urban regions.)
There were no California metros on the list by April. And the homebuying sun has now set not just on California, but on the whole Western region.
When we look at the West Coast market, whether it’s Oregon, Washington, California, Arizona, or Nevada, house values have continued to grow even as mortgage rates have risen, according to George Ratiu, Realtor.com’s manager of economic research.
Mortgage rates for a fixed-rate 30-year mortgage were 3.55% at the start of this year. According to Freddie Mac, this rate increased to 5.3% during the week ending July 7. And increasing mortgage rates (and housing prices) may be pushing the desire to locate a home in a reasonable price range.
When hot real estate markets cool, what happens?
Housing markets go through predictable cycles. A scarcity of housing supply promotes greater new house building. Home builders gradually build up a head of steam, since the process from locating sites to drawing permits to constructing the home to promoting and selling them all takes time. At a certain point, housing developers start constructing more houses than the local demand truly needs or desires, but by the time they find it, they still have months or even years to go in order to conclude previous development projects.
At that time, supply outweighs demand, and you get a home market downturn. Developers cease constructing, and ultimately, supply is constricted again, and the cycle repeats again.
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