While expensive coastal markets on the coasts like Seattle and San Jose are cooling off, with homes lingering on the market longer than this time last year as bidding wars become less common, some smaller, affordable inland metro areas are heating up. Atlanta, Akron, Ohio and Rochester, New York are a few of the metro areas where supply is shrinking, leaving more homes to go under contract within days, and for above-list price than a year ago.
To find the markets that are still heating up we ranked the top 25 metro areas with populations of at least 500,000 people according to three indicators of a competitive seller’s market, based on data for the four weeks ending October 14, compared with the same period a year earlier:
- Declines in the number of homes for sale (inventory)
- Increases in the share of homes going under contract within two weeks of their market debut
- Increases in the share of homes selling for more than their list price
Top metro areas where the market is heating up the most
|Metro Area||YoY percent change in Inventory||Off Market in 2 Weeks||YoY percentage point change in Off Market in 2 Weeks||Sold Above List||YoY percentage point change in Sold Above List||Median Sale Price||YoY percent change in Median Sale Price|
|Wilmington, DE||-24.5%||25.0%||+6.4 pts||22.1%||+4.5 pts||$219,900||+4.8%|
|Philadelphia, PA||-22.9%||21.4%||+2.4 pts||21.2%||+3.0 pts||$195,000||+8.3%|
|Atlanta, GA||-19.7%||28.8%||+4.1 pts||21.1%||+1.0 pts||$235,000||+7.3%|
|Rochester, NY||-16.2%||36.4%||+5.4 pts||36.6%||+8.2 pts||$141,050||+4.5%|
|Greensboro, NC||-15.6%||11.3%||+2.7 pts||23.2%||+5.8 pts||$166,000||+7.8%|
|Akron, OH||-12.5%||15.9%||+1.3 pts||22.4%||+2.9 pts||$143,500||+10.3%|
|Richmond, VA||-8.8%||39.8%||+1.7 pts||29.2%||+1.9 pts||$235,000||+2.2%|
|Buffalo, NY||-8.3%||38.6%||+4.9 pts||39.8%||+2.1 pts||$159,000||+8.5%|
Contrast the numbers above with markets like Seattle, San Jose and Portland, where inventory has been increasing by double digits, and the shares of homes going under contract quickly is shrinking. Homes in the metro areas that are heating up are also considerably less expensive than not only the hot coastal markets, but also than the national median price of about $300,000. Plus, except for Atlanta and Philadelphia, all of the heating-up metro areas are smaller, with populations under 2 million. Atlanta is also a top migration destination, moving up from #5 among long-distance Redfin.com user searches in the third quarter of 2017 to #2 in the third quarter this year.
“Competition in Wilmington has become fierce and often buyers have to offer over asking and compete against three to six other offers,” said local Redfin agent Claryssa McEnany. “I’m working with several buyers moving to the area from New Jersey who have expressed that they want to escape the higher property taxes that they can no longer fully deduct.”
Markets like Wilmington are still deep in seller’s market territory, “Too many sellers are staying put!” according to McEnany. “Buyers are motivated and want to move now but there just aren’t enough homes available.”
In the face of the inventory shortage that has been worsening since early 2016, some of McEnany’s clients are choosing to expand their search area or make more compromises to get into a home.
It’s likely that even if the real estate slowdown becomes more widespread, these inexpensive markets will continue to show strength thanks to their big advantage in affordability.
Featured photo: 305 W Hortter St., Philadelphia, listed by Redfin