The housing market’s stagnation this year is projected to carry over into 2024. But a forecast published today by Realtor.com identifies metro areas that are poised to see both rising prices and sales next year, with Toledo, Ohio, leading the way.
The top housing markets in 2024 are mainly located in the Northeast, Midwest, and California, according to Realtor.com’s analysis. The listings site estimated changes in home prices and sales volume in locales across the U.S., then used those combined forecasts to identify places among the 100 largest metros where both would climb the most. (Barron’s parent company,
News Corp,
owns Move, which runs Realtor.com and Move.com).
Oxnard, Calif.; Rochester, N.Y., San Diego, and Riverside, California round out the top five. Next up are Bakersfield, California; Massachusetts locales Springfield and Worcester; Grand Rapids, Mich., and Los Angeles.
In Toledo, existing-home prices will rise 8.3% from the year prior, while sales will climb 14%, for a combined 22.3%, according to the forecast. Prices and sales will rise 3.3% and 18%, respectively, in Oxnard, and 10.4%, and 6.2%, in Rochester.
The list’s standouts can be considered anomalies. Realtor.com said last week it expects U.S. existing-home sales volume will be about flat next year while prices fall by 1.7%. Larger metropolitan areas will broadly see higher price growth but fewer sales due to inventory constraints.
The Midwestern and Northeastern top markets are more affordable—and have economies anchored around sectors expected to grow in 2024, such as education, healthcare, and manufacturing, the report says. Generally, strong areas employment is a driver of home sales.
Five of the top 10 metro areas are in southern California, which is estimated to perform better than the state as a whole, Realtor.com says. The projected average sales growth of these five markets is 13.1%, compared with a 4.1% decline for other California areas in the report’s top 100.
In the top housing markets, two trends will drive the outsized sales growth and price gains, the report says. In some relatively affordable markets, buyers’ hunt for lower housing costs will spur sales. In some expensive markets hit hard by rising mortgage rates in 2022 and 2023, lower rates in the coming year will spark a rebound in sales.
“Home buyers are still looking for markets where they can capitalize on lower prices,” Danielle Hale, Realtor.com’s chief economist, said in a statement. “Even in some of the more expensive markets, we’ll see double-digit sales growth as sales start to rebound from their historic lows, helped by mortgage rates which are expected to finally relent.”
Not all of 2023’s laggards will rebound. Prices and sales combined are expected to fall the most in Austin; Baton Rouge, La.; and Portland, Ore., according to the report.
The survey’s expectations build upon this year’s shifting price trends. As measured by the Federal Housing Finance Agency, prices in this year’s first three quarters have risen the most in New England and the East North Central census division—a group of states including Wisconsin, Illinois, Indiana, Ohio, and Michigan. Over the same period in 2022, prices had gained the most in the South Atlantic and the Mountain regions.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
Read the full article here
