NEW YORK and SANTA CLARA, Calif., April 26, 2023 (GLOBE NEWSWIRE) -- The Wall Street Journal and Realtor.com® today released the WSJ/Realtor.com® Spring 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.
The Top 20 Emerging Markets for Spring 2023 are:
- Lafayette-West Lafayette, Ind.
- Bloomington, Ill.
- Elkhart-Goshen, Ind.
- Lebanon, Penn.
- Fort Wayne, Ind.
- Topeka, Kan.
- Sioux City, Iowa-Neb.-S.D.
- Omaha-Council Bluffs, Neb.-Iowa
- Springfield, Ill.
- Manchester-Nashua, N.H.
- Janesville-Beloit, Wisc.
- Columbus, Ohio
- La Crosse-Onalaska, Wisc.-Minn.
- Johnson City, Tenn.
- Springfield, Ohio
- Hickory-Lenoir-Morganton, N.C.
- Burlington, N.C.
- Columbia, Mo.
- Waterloo-Cedar Falls, Ind.
- Knoxville, Tenn.
Key Trends Among the Spring 2023 Top 20 Emerging Housing Markets:
Emerging Markets Offer Relief from High Costs
With home prices still elevated and inflation easing but still well above the target level, this quarter’s emerging markets lean further into affordability relative to previous quarters. Home list prices in all but two of the top 20 markets are lower than the median-priced U.S. home for sale, which was $424,000 in March. The lowest priced locale on the list, Springfield, Ill., offered 66% savings on the median priced home relative to the national level in March.
Demand for Affordability Drives High Price Growth
The median price of the typical home for sale is still higher on a year-over-year basis nationwide and this is even truer among the top markets. The average increase in listing price was 29% among the top 20 markets compared to 12% nationally for the 12 months ending in March 2023. All of the top markets saw price growth exceed the national rate. Each market saw double-digit price growth except Springfield, Ohio. Although 17 of the top 20 emerging markets saw an increase in time on market, homes sold on average 12 days faster than the average across the 300 markets ranked for the index (36 vs. 40 days). Additionally, all 20 markets outperformed this national average.
Much Smaller Markets with Healthy Economies and Easy Commutes
Only one of the top 20 markets has more than a million residents: Columbus, Ohio, although Omaha-Council Bluffs, Neb.-Iowa, comes close and Knoxville, Tenn., isn’t too far behind. Just two of the top 20 markets had an unemployment rate above the 300-market average (3.6%) and on average unemployment in the top 20 emerging markets was just 3.0%. Even though these areas have few out-of-work job seekers, commutes are relatively easy, clocking in at just over 21 minutes compared to nearly 24 minutes on average across all markets reviewed in the index. Typical wages lagged behind the U.S. with an average weekly wage of $1,106 among the top markets compared to $1,174 among the broader market average. But this roughly 6% gap in wages is made up for in the cost of living differential. Prices in the top emerging markets on average are less than 92% of the national price level, and only one market has prices that are slightly higher than the national average.
A Lower, but Growing Share of Out of Market Shopping Interest
While some markets like Manchester-Nashua, N.H., and fall 2022 No. 1 market Johnson City, Tenn., attract an outsized share of shoppers from elsewhere, others including Columbus, Ohio, and Omaha-Council Bluffs, Neb.-Iowa, rely more on local housing demand. Reflecting the broad trend of willingness to relocate among home shoppers, both the top emerging markets and broader index markets have seen the share of out-of-market shoppers grow more than seven percentage points compared to one year ago with the top emerging markets seeing a somewhat greater increase in out of market shopping share.
City Spotlight: Bloomington, Ill.
This list’s highest-ranked emerging market is Lafayette-West Lafayette, Ind., the same as last quarter in our winter 2023 index. Located just a couple hours west is the No. 2 market of Bloomington, Ill. Home to the corporate headquarters of State Farm Insurance Co., other major Bloomington-Normal employers include Illinois State University and Rivian, a maker of electric trucks that has been ramping up employment in its production facility in the area. The typical home for sale in Bloomington was listed for $339,000, a 20% discount compared to the national median for March. More than half of views to properties in Bloomington come from outside of the metro, with particularly sizable out-of-metro attention from the Chicago area.
There are many familiar places on the list of the top 20 emerging markets: 13 members of the winter 2022 list, most notably No. 1, Lafayette-West Lafayette, Ind. This is the second quarter that this market has held the top spot. Among the markets that have remained on our list are the ever-popular southern locales Burlington, N.C., Johnson City, Tenn., 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.
Markets Falling Out of the Top 20
Of the seven markets that did not remain on the list from the winter into the spring, five tumbled a bit but remained in the top 50. The two biggest movers, Savannah, Ga., and South Bend, Ind., which fell 61 spots and 102 spots, respectively, remained in the top half of areas studied, ranking 69th and 117th this quarter. The markets that departed the top 20 in our index included two Southern markets of Savannah, Ga., and Kingsport-Bristol, Tenn., as well as Portland-South Portland, Maine, and the midwestern markets of Springfield, Mo., Rapid City, S.D., Milwaukee, Wisc., and South Bend, Ind. As economic conditions have changed since earlier in the year, with mortgage rates rising sharply, these largely affordable markets fell out of favor in exchange for even lower-priced areas.
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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For The Wall Street Journal