As we look ahead to 2024, the housing market is expected to see some shifts and trends across different regions in the United States. While the national market is projected to see a slight increase in home sales and a dip in prices, there are specific housing markets that are poised to fare differently. In this article, we will explore the top housing markets for 2024, highlighting the factors that contribute to their growth and potential challenges they may face.
Embracing Double-Digit Growth: Markets Rebounding From Lows
Eight metros are predicted to experience double-digit sales growth in 2024, with most of them being expensive markets in the West that saw significant declines in sales in 2023. These metros include Oxnard, CA; Toledo, OH; Riverside, CA; Bakersfield, CA; Las Vegas, NV; San Diego, CA; Springfield, MA; and Sacramento, CA. However, it's important to note that these metros are projected to have sales levels below the peak activity of 2021-2022 and even below the pre-pandemic period of 2017-2019. This shows that while there is growth, it is still below previous highs.
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The Top 10 Metropolitan Areas for 2024
To identify the top housing markets for 2024, we ranked the largest 100 metros based on their expected sale and price growth rates. The top 10 metropolitan areas that emerged for 2024 are:
- Toledo, OH: With 14.0% year-over-year sales growth and a median sale price increase of 8.3%, Toledo is leading the pack in the Midwest.
- Oxnard-Thousand Oaks-Ventura, CA: Despite a sales decline of -35.1%, Oxnard is projected to see a modest 3.3% increase in median sale price.
- Rochester, NY: This affordable Northeastern market is expected to have 6.2% sales growth and a significant 10.4% increase in median sale price.
- San Diego-Chula Vista-Carlsbad, CA: San Diego is rebounding from a sales decline of -31.7% with an 11.0% increase in sales and a 5.4% rise in median sale price.
- Riverside-San Bernardino-Ontario, CA: Despite a sales decline of -25.2%, Riverside is projected to see a 2.0% increase in median sale price.
- Bakersfield, CA: Bakersfield is expected to have 13.4% sales growth and a modest 2.3% increase in median sale price.
- Springfield, MA: With 10.5% sales growth and a 4.2% increase in median sale price, Springfield is one of the top markets in the Northeast.
- Worcester, MA-CT: Worcester offers 9.1% sales growth and a robust 4.8% increase in median sale price, making it an attractive market in the Northeast.
- Grand Rapids-Kentwood, MI: Grand Rapids rounds out the top 10 with 6.1% sales growth and an impressive 7.2% increase in median sale price.
- Los Angeles-Long Beach-Anaheim, CA: Despite a sales decline of -31.9%, Los Angeles is projected to see a 3.5% increase in median sale price.
Consistent Performance: Markets Repeating Top Performance
Some markets have consistently shown strong performance in previous years and are expected to continue their momentum in 2024. Toledo, Grand Rapids, and Worcester, for example, appeared on the list of the top predicted housing markets in 2023 and are projected to maintain their positions in 2024. Worcester, in particular, has slightly underperformed compared to initial expectations but remains one of the hottest markets in the country. Other markets that have made the top list in previous years include Rochester, Springfield, San Diego, and Los Angeles.
Factors Driving the Top Markets: Midwest and Northeast
The top markets in the Midwest and Northeast share common factors that make them attractive to buyers. These cities offer more affordable housing options compared to larger urban centers, making homeownership more attainable. Additionally, these markets exhibit a degree of insulation from higher mortgage rates due to a higher proportion of homeowners without a mortgage. These regions also provide a high quality of life with cultural amenities, recreational opportunities, and educational institutions. Factors like these make the Midwest and Northeastern markets appealing choices for individuals and families seeking a well-rounded, cost-effective, and vibrant lifestyle.
Toledo, OH: Affordability and Community
Toledo stands out for its affordability, with a median home listing price that is significantly lower than the national average. This cost-effective housing market offers a range of options appealing to first-time buyers and families. Toledo is known for its close-knit communities, high quality of life, and a variety of cultural amenities. The city also boasts manufacturing, healthcare, education, and government jobs, which contribute to its vibrant economy.
Rochester, NY: Affordability and Job Opportunities
Rochester offers an affordable housing market with various housing options, making it an ideal choice for both first-time buyers and families. The region has a strong job market in high-knowledge industries like healthcare, education, government, and manufacturing. Rochester also boasts a thriving arts and cultural scene, numerous parks, and access to the stunning Finger Lakes region. These factors contribute to the city's high quality of life.
Springfield, MA: Affordability and Rich Cultural Scene
Springfield is an attractive market for homebuyers due to its affordability compared to larger nearby cities like Boston. The city offers a cost-effective housing market, a rich cultural scene, numerous parks, and recreational opportunities. Springfield is also home to respected educational institutions, including colleges and universities. The metro area's central location in New England enhances its appeal as a convenient place to call home.
Worcester, MA-CT: Affordable Housing and Access to Major Cities
Worcester stands out for its affordable housing options and convenient proximity to major cities like Boston. The city offers a high quality of life with access to education, healthcare, cultural activities, and recreational opportunities. While its median list price is slightly above the national average, it is significantly lower than housing prices in the nearby Boston and New York metro areas. Worcester's diverse economy, strong educational institutions, and transportation infrastructure further enhance its appeal as a desirable place to call home in the Northeast.
Grand Rapids-Kentwood, MI: Affordability and Vibrant Lifestyle
Grand Rapids offers a relatively low-cost housing market, making it an appealing choice for prospective homebuyers. The region has a diverse and growing economy, with opportunities in manufacturing, healthcare, and the technology industries. Grand Rapids is known for its dynamic arts and cultural scene, numerous recreational activities, and family-friendly communities. The city provides a high quality of life and a balanced lifestyle for individuals and families in the Midwest.
Southern California Rebounding in 2024
While the top housing markets in the Midwest and Northeast offer affordability and stability, Southern California markets are also expected to bounce back in 2024. Five California metros made it to the top 10 list, including Oxnard, San Diego, Riverside, Bakersfield, and Los Angeles. Despite having experienced sales declines in 2023, these markets are projected to see sales growth in 2024, outperforming other Californian metros in the largest 100 list. However, it's worth noting that the sales levels in these markets are still expected to be lower than previous highs.
Key Wildcards: Labor Market, Macroeconomy, and Mortgage Rates
While the top housing markets are expected to show strength in 2024, there are some potential challenges that could impact their performance. The labor market and macroeconomy play a crucial role in the housing market, and any unexpected increase in unemployment could diminish the forecasted growth. Additionally, mortgage rates are a significant factor to consider. If interest rates take longer to fall or even increase again, it could impact sales trends and buyer behavior.
Large Metros: Outperforming in Price Growth, Underperforming in Sales
In general, the largest metropolitan areas are projected to see price growth outpace the national rate. However, sales in these areas are expected to underperform even the national rate of decline. This can be attributed to low inventory levels and high demand, which have stabilized prices but hindered sales activity. The 100 largest metros are projected to have a lower unemployment rate than the national average, indicating a strong labor market that supports home sale prices.
Regional Outlook: Northeastern Metros Leading Sales and Price Growth
Looking ahead to 2024, Northeastern large metros are expected to lead in sales growth, while metros in the Midwest, West, and South may see declines. Strong local economies and relatively lower unemployment rates contribute to the housing market's favorable performance in the Northeast. However, it's important to note that even with the projected growth, sales in these markets are still expected to be lower than the pre-pandemic period.
Impact of Flexible Work Modes on Sales
The rise of remote work has significantly impacted home buying decisions. Markets with less flexible work arrangements are predicted to experience sales growth, as individuals are confined to local searches due to work constraints. On the other hand, markets with more flexible work modes provide buyers with the option to explore homes beyond their immediate vicinity, resulting in a decline in sales activity. This trend persists even when controlling for affordability levels across the largest 100 metros.
In conclusion, the top housing markets for 2024 offer a mix of affordability, job opportunities, cultural amenities, and a high quality of life. These markets are poised to see sales and price growth, although some challenges remain. Factors such as the labor market, macroeconomy, and mortgage rates will play a significant role in shaping the housing market's performance. As we move into 2024, it will be interesting to see how these top markets evolve and adapt to changing economic conditions.
