Temperatures might be dropping in Buffalo, New York—but the housing market is heating up. The city in western New York will be this year’s hottest market,
Zillow
said Thursday.
Zillow’s top markets for 2024 “all boast solid economic fundamentals, relatively fast-moving for-sale housing inventory, plentiful likely buyers and expectations for stable home values,” Anushna Prakash, data scientist for Zillow Economic Research, wrote in a report posted to Zillow’s website. Cincinnati and Columbus, Ohio, are second and third on the list, respectively, followed by Indianapolis and Providence, Rhode Island.
Zillow isn’t the only forecaster with a Great Lakes city at the top of the list. Realtor.com ranked Toledo, Ohio, first among the 100 largest U.S. metros areas poised to see both rising prices and sales this year. (Barron’s parent company, News Corp, owns the company that operates Realtor.com).
Last year’s housing market headwinds, such as relatively high mortgage rates and a low supply of previously owned homes for sale, are expected to ease this year but hurdles remain. Midwestern cities and some northeastern locales have become forecaster favorites as housing costs have risen. Realtor.com expects home prices in 2024 to grow most in places like Detroit; Rochester, New York; and Des Moines, Iowa.
The hunt for relative affordability “likely means another strong year in the Midwest, where homes are generally less expensive than many coastal markets,” Zillow senior economist Nicole Bachaud previously told Barron’s. Smaller northeastern towns, too, “feel like a bargain compared to bigger markets nearby such as New York City, Boston, or Washington, D.C.”
Compared with home values nationally, Buffalo—along with runners-up Cincinnati, Columbus, and Indianapolis—stand out for their relative affordability, according to Zillow. Home values in the three metros are significantly lower than the rest of the nation. At just under $250,000, Buffalo’s typical home value is nearly 30% less than the national average.
“Housing markets are healthiest where affordable home prices and strong employment are giving young hopefuls a real shot at buying and starting to build equity,” Prakash said.
The company foresees the typical Buffalo home value dropping 0.2% in 2024, according to its metro-level forecasts. That’s not an anomaly: of Zillow’s largest 50 metropolitan areas, values are projected to decline in 35. Nationally, prices are estimated to be flat through November 2024, according to its most recent forecast.
“I’m cautiously optimistic that the housing market will get back on stable footing in 2024,” Prakash said. “We shouldn’t see the massive price spikes of the early pandemic or fast-rising mortgage rates of recent years.”
Of the 50 largest metropolitan areas, values will increase the most in the Florida cities of Miami and Tampa, followed by Charlotte, North Carolina, with anticipated gains between 1.2% and 1.9%, according to Zillow’s forecast. Values will drop most in San Jose, Calif.; New Orleans, and San Francisco, with expected declines between 4.8% and 6.1%.
Buffalo has more going for it than just relatively affordable home prices: it has the highest number of new jobs per new housing permit, Zillow said, which it characterizes as an indicator of anticipated demand.
Homes in the Buffalo area, and others at the top of the list, also sell relatively quickly. Homes in Buffalo spend 14 days on the market, while those in Cincinnati and Columbus sell in 11, Zillow data show—much quicker than the U.S. average of 21 days.
Write to Shaina Mishkin at [email protected]
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