NEW YORK and SANTA CLARA, Calif., Feb. 01, 2023 (GLOBE NEWSWIRE) -- The Wall Street Journal and Realtor.com® today released the WSJ/Realtor.com® Winter 2023 Emerging Housing Markets Index, which revealed Lafayette-West Lafayette, Ind., is now 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.
The Top 20 Emerging Markets for Winter 2023 are:
- Lafayette-West Lafayette, Ind.
- Fort Wayne, Ind.
- Elkhart-Goshen, Ind.
- Topeka, Kan.
- Johnson City, Tenn.
- Columbia, Mo.
- Kingsport-Bristol-Bristol, Tenn.-Va.
- Savannah, Ga.
- Columbus, Ohio
- La Crosse-Onalaska, Wis.-Minn.
- Manchester-Nashua, N.H.
- Burlington, N.C.
- Portland-South Portland, Maine
- Knoxville, Tenn.
- South Bend-Mishawaka, Ind.-Mich.
- Sioux City, Iowa-Neb.-S.D.
- Springfield, Ill.
- Springfield, Mo.
- Milwaukee-Waukesha-West Allis, Wis.
- Rapid City, S.D.
Key Trends Among the Winter 2023 Top 20 Emerging Housing Markets:
Housing Remains Relatively Steady
With the housing market nationwide rebalancing in the face of still high mortgage rates and home prices, home sales have declined sharply and inventories have grown. The average yearly increase in the number of homes for sale across the top 20 markets is 21% compared to 30% nationwide. Seven of the top markets saw the number of homes climb faster than the national average, including the top three markets: Lafayette-West Lafayette, Ind., Fort Wayne, Ind., and Elkhart-Goshen, Ind.
Smaller Markets with Healthy Economies and Easy Commutes
This quarter’s emerging markets are smaller than previous quarters. Only two of the top 20 markets have more than a million residents: Columbus, Ohio, and Milwaukee-Waukesha-West Allis, Wis. All but one of the top markets had an unemployment rate below the 300 market average (3.6%) and on average unemployment in the top 20 emerging markets was just 3.0%. Typical wages lagged behind with an average weekly wage of $1,070 among the top markets. The cost of living differential makes up for this roughly 3% gap in wages.
A Strikingly Average Share of Out of Market Shopping Interest and Mobility
On average, this winter’s top markets are a near match to the national average across all markets (70.2% vs. 70.8% overall). While some markets like Savannah, Ga., and previous number one market Johnson City, Tenn., attract an outsized share of out-of-market buyers, others including Columbus, Ohio, and Milwaukee-Waukesha-West Allis, Wis., rely more on local housing demand. Winter 2023 markets have residents who are, on average, no more mobile than residents in the top 300 markets. Two exceptions to this trend are Columbia, Mo., and this quarter’s number one market, Lafayette-West Lafayette, Ind.
The Lafayette-West Lafayette area is a manufacturing hub whose workforce also contains a higher share of government workers. The typical home listed for sale in December was priced under $300,000, a nearly 25% discount over the December national median home list price of $400,000. While the population is more mobile, its share of out-of-state home buyers is modestly lower than the 300 market average. In addition to Purdue University sporting events and outdoor offerings, Lafayette-West Lafayette is home to gardens, museums, a Frank Lloyd Wright designed home and other cultural attractions.
There are many familiar markets on the list: eight of the Winter 2023 markets were also on the Fall 2022 list, most notably number one, Lafayette-West Lafayette, Ind. Among the markets still on the list are Burlington, N.C., and Johnson City, Tenn., Columbus, Ohio, and various small to mid-sized Midwestern cities that offer affordable housing and low costs of living.
Markets Falling Out of the Top 20
Of the 12 markets that fell off the list this quarter, five tumbled but remained in the top 50. The two biggest movers, Cape Coral-Fort Myers, Fla., and Naples-Immokalee-Marco Island, Fla., fell 164 spots and 171 spots, respectively. The markets that dropped off last quarter’s top 20 are mostly Southern markets, including five Florida markets, as well as Columbia, S.C., Fayetteville-Springdale-Rogers, Ark.-Mo., Nashville-Davidson-Murfreesboro-Franklin, Tenn., and Raleigh, N.C.
The other three markets that did not make the Winter 2023 list were Visalia-Porterville, Calif., Colorado Springs, Colo., and Yuma, Ariz. As economic conditions have changed and mortgage rates rise sharply, expensive markets have fallen out of favor, replaced by low-priced Midwestern markets.
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 per capita “everyday splurge” stores in an area; commute (6.25%); and estimated effective real estate taxes (6.25%).
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