dHot Housing Markets in 2019 vs. 2020

Let's be honest. If anything about 2020 has been unpredictable, the housing market is near the top of the list. In March 2019, the Federal Reserve indicated only slight rate increases, if any, over the next two years. Homebuyers rejoiced at the opportunity to lock-in a low rate, not knowing that 2020 would bring a pandemic and historically low rates.

Around this time last year, we put out a blog about the hottest housing markets in the US. Low employment rates and dropping mortgage rates increased buying power across most demographics, especially millennials. Since then, rates have dropped to an unforeseen low, while unemployment rates skyrocketed to a staggering 14.7% in April of this year. (For reference, the unemployment rate in April 2019 was 3.6%.)

Between late-February and now, industry experts have attempted to predict what the housing market will do; some braced for the worst-case scenario. However, after a brief lull in the market, sales are only down 11.3% from 2019, and home values were up 5.1% in August compared to a year ago.

All this to say, the housing market is still booming despite the ongoing pandemic and the worst unemployment rate we've seen in decades. So, are buyers still interested in the same markets? Is city-living no longer affordable (or safe) due to the coronavirus? Let's break it down.

Hottest Markets in 2019

Booming mega-cities like NYC, LA, and Seattle have become "luxury cities" over the past few years as taxes, rent, and housing prices continue to soar, forcing current residents to consider living elsewhere. A recent Zillow report claims that suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets in 2020. However, they also note that suburbs displaying persistent sales, despite a more-limited supply, could suggest hotter market conditions.

Last year, these five cities ranked the highest on our list, based on population, time on the market, and median listing price.

Grand Rapids, Michigan

Two hours northwest of Detroit is a quiet city with plenty of parks and nightlife to keep residents happy and busy in their free time. Millennial buyers make up 48% of new purchase mortgages.

• Population: 193,887
• Time on Market (Before Selling): 10 days
• Median Listing Price: $178,050

Omaha, Nebraska

Highly rated school districts with a low cost of living are just a few attractive qualities about Omaha. Millennial buyers make up 43% of new purchase mortgages.

• Population: 443,072
• Time on Market (Before Selling): 21 days
• Median Listing Price: $238,950

Boise, Idaho

Home to Boise State University, endless amenities, and an average home value amount 14% higher than the US average, it's no surprise that Boise is on this list. Millennial buyers make up 28% of new purchase mortgages.

• Population: 218,677
• Time on Market (Before Selling): 14 days
• Median Listing Price: $289,950

Shawnee, Kansas

With a population less than 70,000, this little city is known for its walkable downtown, boutiques, and restaurants. Homebuyers looking for a small-town feel with a low cost of living will love Shawnee. Millennial buyers make up 43% of new purchase mortgages.

• Population: 64,444
• Time on Market (Before Selling): 13 days
• Median Listing Price: $220,050

Rochester, New York

Packed with a diverse culture, job opportunities, and exciting amenities, Rochester continues to attract young homebuyers looking for adorable living with a big city feel. Millennial buyers make up 43% of new purchase mortgages.

• Population: 210,291
• Time on Market (Before Selling): 17days
• Median Listing Price: $125,050

Hottest Markets in 2020

With most cities still in the late stages of reopening, and some cities reclosing due to increasing Covid-19 cases, it's hard to say if buyers would rank location over availability and affordability in this economic climate. That being said, these markets are currently on the rise and on our radar.

Unexpected Cities

"Hot" markets tend to vary across different sites, graphics, and reports. Some sources take factors such as crime and nightlife into their rankings, whereas others focus primarily on the cost of living, location, and median listing price.

According to AreaVibes, a website that takes education, employment, crime, cost of living, amenities, and many more factors into consideration, Ohio is the place to be. Three of their top five highest-ranking cities (based on a livability score) are all in Ohio, just outside of Columbus. The sites' top 10 include:

1. Grandview Heights, OH
2. Hilliard, OH
3. Huntington Woods, MI
4. Upper Arlington, OH
5. Papillon, NE
6. Worthington, OH
7. Glendale, MO
8. East Grand Rapids, MI
9. Grosse Pointe Park, MI
10. Ankeny, IA

Shocked? Us, too. These cities scored a 96 or higher on their livability scale, and residents rave about low crime, affordable real estate, and excellent education systems. In case you were wondering, Americas 10 largest cities (by population) didn't do as well when ranked on the same scale.

1. New York City - 66
2. LA - 53
3. Chicago - 60
4. Houston - 73
5. Phoenix - 63
6. Philadelphia - 57
7. San Antonio - 78
8. San Diego - 70
9. Dallas - 74
10. San Jose - 67

Trending Cities

Diving into other statistics, such as time on market and buyer interest, the list of trending cities is much more diverse. In a recent study by Realtor.com, the site recognized the following ten cities as "hot" in 2020.

1. Colorado Springs, CO

• Average No. of Days on Market: 13
• Median List Price: $287,000

2. Reynoldsburg, OH

• Average No. of Days on Market: 17
• Median List Price: $204,000

3. Rochester, NY

• Average No. of Days on Market: 18
• Median List Price: $162,000

4. Melrose, MA

• Average No. of Days on Market: 19
• Median List Price: $644,000

5. South Portland, ME

• Average No. of Days on Market: 21
• Median List Price: $377,000

6. Topeka, KS

• Average No. of Days on Market: 19
• Median List Price: $184,000

7. Hudson, NH

• Average No. of Days on Market: 22
• Median List Price: $350,000

8. Worcester, MA

• Average No. of Days on Market: 21
• Median List Price: $318,000

9. Springfield, VA

• Average No. of Days on Market: 7
• Median List Price: $553,000

10. Raleigh, NC

• Average No. of Days on Market: 25
• Median List Price: $273,000

No matter where you move to, you need a good home buying team in your corner! That means working with a lender first to find out how much you can afford and a real estate agent to find the perfect home for you. To work with a local PacRes Mortgage Advisor, check out all the states we're licensed and located here.

Are you ready to take advantage of historically low rates? We can get you started! Connect with us today to learn more!