What are the 10 Hottest Housing Markets in 2020?
Affordability is the name of the game in 2020 and the 10 hottest housing markets in the US, as ranked by the National Association of Realtors (NAR), are all very similar. They all have steady job markets, increasing populations and affordability. Though some of these markets are projected to do better than others, any of them would make for a good investment going into the new decade.
The top 10 hottest housing markets for 2020 are Boise City, McAllen-Edinburg-Mission, Tucson, Chattanooga, Columbia, Rochester, Colorado Springs, Winston-Salem, Charleston-North Charleston, and Memphis.
What sets them apart from the rest of America?
Well, for a start, the average asking price among these markets is $292,000 which is lower than the US average. Additionally, due to an average salary of $7,000 less than the national average, monthly payments in these 10 markets are 18% lower than the country’s top 100 markets. Cities like Boise, McAllen, and Tucson, which round out the top 3 spots on our list, are all a good mix of sales growth and price growth. With booming economies and industry moving in, these metropolitan areas look promising for years to come.
Boise City, Idaho
Over the last year, the supply of homes for sale in Boise has decreased by 10% while the prices have risen by 11% and continue to rise. But what does this imply for the future of Boise’s housing market? Obviously, it would not be #1 on our list if it didn’t imply something good but entertain us.
Because of the low cost of living and the booming economy of Boise, the housing market has been booming for years. That doesn’t seem to be slowing down at all. The Boise metro area is building homes and condos at a record rate, wages are increasing, and a recent study by Bank of America shows 72 percent of Millennials are prioritizing buying a house over getting married and having kids. Add all of this to low mortgage rates and a low barrier of entry and you now know why Boise is at the top of our list.
Since 2010, the McAllen-Edinburg-Mission Metro Area has been steadily growing. Unemployment is down almost 5%, the population has increased by 13.9%, and the average age is under 30. The pleasant winters along with the proximity to the Gulf of Mexico makes for a homeowner’s paradise.
The steady increase in population, primarily Millennials looking for work, is boosting the market sales in the McAllen-Edinburg-Mission Metro Area, which projected to climb a staggering 4.4%. This increase in sales is one of the highest in the country.
It would be a crime to leave out that the median income in this area is not even $35,000 and the median home price is $101,600. This creates such a low barrier of entry that the market is open to almost anyone.
Nestled in Southern Arizona, Tucson offers more than just year-round sun and an arid climate. Tucson is not only a haven for older couples looking to retire but also a booming university town that is a breeding ground for start-ups and economic growth.
Tucson has a very large renter market. With tons of retirees escaping the winter weather, students moving in for the new year, and the multitude of military members that are stationed at Davis-Monthan Air Force Base, there is no shortage of people interested in a home. To be specific, in 2017, 36% of Tucson residents were renters.
The most impressive fact about the Tucson housing market, however, it the low cost. The median Tucson home is under $150,000, with the average townhouse costing around $80,000. Compare this with a median annual income of $40,000 and you have a market primed for unobstructed appreciation.
Firms like Volkswagen, Mars, Little Debbie, and McKee foods have put Chattanooga into a position for great economic success. All of these companies operate factories within the City that employ thousands and have been looking to expand. Just 130 miles southeast of Nashville, Chattanooga is known as “The Gateway to the South” and with that title comes the hospitality and blue-collar attitude of the south paired with the charm of the north.
One draw to Chattanooga for buyers and investors is the Extreme affordability of real estate. One study showed that Chattanooga residents spend approximately 7.9% of their income on monthly mortgage payments, compared to 15.1% across the nation. Not to mention, Chattanooga’s housing market has the 3rd lowest property taxes in the nation. With all of this, 2020 is bound to be a good year for Chattanooga’s Housing Market and it doesn’t look like it will slow down any time soon.
Columbia, South Carolina
The capital of South Carolina and the biggest city in the state is quickly becoming one of the top destinations for rental properties. High affordability is the main driver in this area and is attracting investors and providing them with extremely high yields.
In addition to vast healthcare and education sectors within the city, Fort Jackson and Fort McEntire are two major military installations pushing tons of American’s to rent in the Columbia metro area creating a healthy rental demand. Pair this strong demand with extreme affordability, where the median single-family rental home price was 82% less than the U.S. median, and an almost 11% rental yield and Columbia is an investor’s oasis.
Rochester, New York
Though across the U.S, costs and prices are continually rising in metropolitan areas, Rochester has kept its affordable prices, while still having a strong economy and job market. This city is host to two high caliber universities and has a very engaging art scene and nightlife.
In Rochester, the median home price is listed as $149,000 compared to the national average of $257,000. The affordability of Rochester is virtually unmatched across New York metropolitan areas and economists expect extreme population growth as prices elsewhere continue to build. Sales in Rochester are projected to increase by 4.7% in 2020 and continue for the next few years.
Colorado Springs, Colorado
Colorado Springs has some of the highest average home prices on our list and for good reason. This beautiful city situated in the mountains was ranked the number two places to live in the U.S by US News and World report.
Prices are projected to grow by 6.3% in 2020, which is a good sign for investors. Even though sales are projected to decrease by -1.5%, 2019 was the exact opposite. Sales increased by 17.2% YOY at 1,247 units.
With such a good economy and prices increasing at every turn, Colorado Springs is a great place for those looking for a high, long term profit.
Winston-Salem, North Carolina
One of the most appealing aspects of Winston-Salem life is extreme affordability. Though the average income is below the national average, the cost of living is a steal and that starts with the inexpensive housing costs.
Price growth in Winston-Salem is projected to be just .2% above the nation’s average, but sales on the other hand and looking to increase by 3.6% in 2020 and as people continue to find out how affordable this area is, sales will continue to grow throughout the decade bringing in more and more families looking to plant roots.
Charleston-North Charleston, South Carolina
In years past, the Charleston-North Charleston area has been expanding, with new housing divisions being built on the outskirts of the City to fill the demand for those who are trying to escape the hustle and bustle of the city.
Charleston has been strong and consistent ever since the housing bubble in 2008 and is projected to the same in 2020. With over 22,000 people employed at the Joint Air Base Charleston, there will never be a shortage of people looking to rent. If you add this to the large and prosperous education and health sectors present in Charleston, there will always be demand for homes. Charleston’s Prices are expected to increase by 1.1% more than the nation’s average, which is also a great sign for investors.
Memphis Real Estate is one of the most affordable in the country, with a median house price of $115,500 while the median price of a sold home was $109,700. With an average rent price of $970 a month, Memphis is a great place for investors to get in for cheap.
As the list price in Memphis was up 14.2% year over year, the median list price per square foot was less than $50. Memphis was also rated to have the best rent to price ratio throughout the country, which is a perfect sign for those looking to buy and then rent for a profit.
Whether or not there’s a housing market crash around the corner as some predict, these affordable markets appear set to withstand. With affordability being a major focus in 2020, the new decade holds potential for America’s top 10 hottest markets.
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Certified Residential Appraiser, Gynell has a diverse appraisal background covering Commercial, Residential, Rural, Complex and Luxury Properties as well as National Appraisal Review work in the secondary Market. She began her Appraisal training in Oklahoma in 2001 covering Rural and Commercial Properties. With several years as a National Review Appraiser at Fannie Mae and other big banks, Gynell has keen insight into the secondary market guidelines and requirements.