Should Homeowners Sell High Or Stay Put?
Everyone wants to get in early on the next big thing, whether it’s the latest electronic gadget or an online currency that’s about to take off. And real estate is no different.
All across the country, prices are rising to new heights as the number of homes for sale has dwindled to new lows. While offers of over asking price have become practically standard in this turbocharged market—one in which the COVID-19 pandemic has led many folks to seek out larger homes with more land—some housing markets are still doing better than others, and are likely to remain the places to be even when the worst of the pandemic has passed.
The Realtor.com® economics team and the Wall Street Journal’s data team identified the top markets of 2021, and beyond, in the inaugural Wall Street Journal/Realtor.com Emerging Housing Markets Index. They identified the areas with strong housing demand and rising prices combined with robust economies, lots of good-paying jobs, and the amenities that make a place desirable. These markets have lots of restaurants, bars, and shops as well as reasonable commutes to work. The quarterly index looked at a pool of the country’s 300 largest metropolitan areas, which include the main city and surrounding suburbs, towns, and smaller urban areas.
The top markets are a mix of higher-end, outdoorsy, resort areas; smaller cities that have been growing at a breakneck pace; and places that provide a more affordable alternative to larger urban areas that are still just barely within commuting distance. Coeur d’Alene, ID, a popular vacation spot, topped the list, followed by Austin, TX, an emerging tech hub that is growing by leaps and bounds.
“The areas that top our emerging housing markets list are places that have weathered the pandemic relatively well,” says Realtor.com’s chief economist, Danielle Hale. “Their economies are generally doing better than other markets, and they’re attracting a lot of home shoppers from other areas—likely in part due to the relatively widespread work-from-home flexibility in response to the pandemic.”
Note: Homes in the top 10 markets aren’t bargains. Median list prices have appreciated by an average 27% in the past year—compared with 14% across the rest of the nation. Prices were an average $519,100, about 42% higher than the $366,100 median price tag across the 300 metros that were analyzed.
For example, in the Coeur d’Alene metropolitan area, the median home list price was $799,000 in March, according to Realtor.com data.
These top markets can command these higher prices because there are buyers who can afford them.
Unemployment is lower in these metros, at 5.54%, than the rest of the country, at 6.3%. Median wages are also a little higher, likely to compensate for the higher cost of living. Many also appeal to buyers from other states and even other countries.
“By design, these are areas that are great places to live,” says Hale. “Many of these areas are smaller, and they all boast great nearby activities—places for hiking, boating, and enjoying the outdoors.”
The problem is these markets, like the rest of the country, simply don’t have enough homes for sale to meet the demand from buyers. That means prices are more likely to stay high—and even continue going up.
“Housing trends in these markets have fundamentals that should mean buying a home is a good investment,” says Hale.
The top real estate markets of 2021
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