Homebuyers Are Finding Tons of Bargains in This One State—but How Long Will It Last?

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While winter is generally a slow time for real estate as homebuyers hunker down and wait for spring, certain cities—and in fact, one entire state—are defying those odds.

The Realtor.com® Hottest Markets List for January has ranked Manchester, NH (a more affordable alternative to Boston, about an hour away), No. 1 for the 18th time in the past two years. Coming in second was Rochester, NY, on the shores of Lake Ontario. Neither of these metros is much of a surprise, given they’ve lingered near the top of this list many times in the past.

But the No. 3 hottest market—Columbus, OH—is where things get interesting. Why? Because it’s just one of five cities in Ohio that made January’s top 20. That’s a whole lot of Buckeye State property people are snapping up!

(The rankings factor in a combination of demand—measured by the number of unique views per home listing—and how quickly homes are selling in that market.)

Overall, the Midwest flexed its might in January by nabbing a total of 12 spots on the list, the highest number in this data’s history. This recent hot streak all boils down to one factor: Homes here are bargains, at least compared with the rest of the country.

“Buyers can get more bang for their buck in the Midwest, which means demand has remained relatively high in the region while dwindling elsewhere,” says Hannah Jones, an economic data analyst at Realtor.com.

The average home listing price for January’s 20 hottest real estate markets was $327,000.

But the Midwest had even lower average listing prices of $252,000—about 37% below the national median price tag of $400,000.

Why Ohio continues to dominate

Wisconsin had three spots in the top 20, Illinois had two, and Kansas and Indiana each nabbed one. The Midwestern markets on the list received an average of 1.8 times the number of views as the typical listing.

But it’s Ohio that continues to stand out as a hot-market heavyweight.

Average home prices in Ohio range from $344,000 in Dayton, No. 6, to $176,000 in Akron, No. 10, making these cities an attractive option for buyers facing today’s higher mortgage payments. Cincinnati came in at No. 14 followed by Canton at No. 17.

And while affordability is the common thread of Ohio’s popularity, the state also boasts an overall low cost of living and “plenty of access to exciting art, sports, and outdoor activities,” says Jones.

“Columbus, Ohio’s largest city, is the state’s capital and home to Ohio State University as well as a booming art and nightlife scene,” Jones explains. “Dayton boasts the Wright-Patterson Air Force Base and is conveniently situated between Columbus and Cincinnati, making it a great location for military employees to live within easy driving distance of two of Ohio’s largest cities.”

It’s little wonder that homes priced right are selling fast—and at a premium.

“This past weekend, I put three homes in contract,” says Columbus-based Kyle Alfriend, of Alfriend Real Estate Group/ReMax. “All three involved multiple offers and sold above asking price, higher than any prior sale price in the subdivision.”

The hot Midwest sees home prices rising

Yet the increasing popularity of these Midwestern markets is starting to have an unsettling effect on their affordability: Home prices in America’s hottest markets are steadily rising.

In January, the median price growth of the average hottest markets reached its highest level in data history, increasing by 21.2% year over year (more than double the national rate of 8.1%).

So for homebuyers thinking of heading to the Midwest, or anywhere for that matter, the time to act might be before the springtime sun spurs higher home prices everywhere.

“It is typical for prices to bottom out in the winter before rising in the spring as homebuyers get back into the market,” says Jones. “Though the 2023 market is not expected to experience the same level of growth as 2022, the spring will likely bring higher prices again this year.”

Realtor.com

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