In recent years, home sellers have had an advantage in many markets, with low inventory, increases in buyer demand, and surging home prices. But the U.S. housing market is expected to calm down during 2019. Home sales are expected to flatten and, while home prices will increase slightly, they will do so at a slower pace, according to the National Association of Realtors (NAR).
While the “national median existing-home price is expected to rise to around $266,800 in 2019” (up 3.1 percent from 2018), it’s not the steep increase buyers and sellers have experienced in recent years. “Home price appreciation will slow down,” says Lawrence Yun, NAR’s chief economist. “The days of easy price gains are coming to an end, but prices will continue to rise.”
Some markets, however, are hotter than others. So, if you’re preparing to sell a home this year, your location may help determine your success.
Here’s a look at five of the best states—and five of the worst states—to sell a home in right now, based on Realtor.com’s Market Hotness Index for December 2018, which measures existing-home supply and demand in 300 metro areas and ranks the markets by hotness.
Of course, a house can sell in any market. It may just sell faster and for a higher price in a top market.
According to Realtor.com, a hotter market will have limited supply, lots of demand, and faster selling times. Below are five of the currently hot markets, listed here in ascending order, with number one being the hottest market as of the December 2018 ranking:
VF Corporation, the textile company that includes global apparel brands such as The North Face, is moving its headquarters from North Carolina to the Denver metro area in 2019. And 22 high-tech companies either opened satellite offices or moved their headquarters to the Denver Metro Area in the past year. The Centennial State’s wealth of outdoor activities, including skiing, hiking, mountain biking, and climbing, adds to its appeal. In Colorado Springs, home inventory is moving 21 days faster than in the rest of the country, according to the Market Hotness Index.
Known for its love of basketball, the Hoosier State is also home to the Indy 500 and the Indianapolis Colts, so it’s a perfect place for sports fans to call home. The city of Fort Wayne, which ranks #5 on the Market Hotness Index, has long been a major manufacturing center and continues to offer jobs in manufacturing, as well as in healthcare, finance, and insurance. Once part of the Corn Belt, Indianapolis is now a sophisticated city offering a wide variety of opportunities for dining, culture, and jobs.
While the rust belt state of Ohio was hit hard by the Great Recession, it has gradually recovered, adding almost 500,000 jobs since 2011. In Columbus, homes for sale have a median number of days on the market of 59, which means they sell 21 days faster than the United States overall. The state’s economy is led by agriculture, automotive and steel industries, and healthcare. For instance, the Cleveland Clinic boosted the state’s economy by $17.8 billion in 2016, according to a local report.
Two of the top three metro areas included in the Market Hotness Index are located in Texas: Midland and Odessa. In addition to fast-growing cities and a growing number of high-paid jobs, including the expanding high-tech region in the Austin area, people appreciate the state’s affordability. Texas is also home to natural beauty (such as Enchanted Rock State Natural Area, Palo Duro Canyon, and Padre Island National Seashore), tasty barbecue, and Southern hospitality.
Four of the top 10 metro areas on the Market Hotness Index are located in California. They include Chico, San Francisco, Sacramento, and Stockton. In Chico, a home listed for sale is on the market a median of 37 days. While California has lost significant numbers of residents in recent years to other states, the Golden State continues to attract young and highly educated people from across the country and around the world, reports The Los Angeles Times.
Now that we’ve covered some of the hottest real estate markets, here are some of the cooler ones, listed here in ascending order, with number one being the least hot market as of the December 2018 ranking:
5. South Carolina
The same thing that draws people to South Carolina—its beautiful beaches—is also contributing to an economic slowdown in the state. Those beaches make the state an important port center, but new and increasing tariffs led South Carolina’s exports to decrease in 2018 for the first time in years and have created uncertainty in the market, according to University of South Carolina researchers quoted in The Post and Courier. Out of 300 metro areas in the Market Hotness Index, the Myrtle Beach area ranks #291 and the Hilton Head area ranks #289. Homes are a little easier to sell in Charleston, which ranks #226.
With a busy port on the Gulf Coast, Alabama has also been hit hard by new tariffs, according to AL.com. And with more than 50,000 federal workers and thousands more government contractors, especially in the Huntsville area where NASA, the FBI, and the Department of Defense have major installations, the state’s economy has been hit hard by the 2019 government shutdown. It’s more difficult to sell a home in the state’s smaller metro areas, such as Dothan (#294 in market hotness) and Florence-Muscle Shoals (#283), where homes spend a median of 100 or more days on the market. However, in larger metro areas, homes are moving faster: Birmingham ranks #168 in market hotness.
Louisiana’s personal income rate grew significantly in 2018, largely due to construction companies based in the state performing work out of state, reports The Advocate. However, the state’s unemployment rate also rose steadily during 2018, the newspaper reports. For those who want to sell a home, the state is largely a buyer’s market. Four Louisiana metro areas—Alexandria, Lake Charles, Lafayette, and Houma—rank in the bottom 20 of 300 metro areas measured by the Market Hotness Index.
The Georgia economy is expected to keep growing but at a slower pace, according to the state’s economist, quoted in the Atlanta Journal-Constitution (AJC). While Atlanta and its suburbs have continued to experience growth, more rural areas of the state are struggling: Two-thirds of school districts in Georgia have seen enrollment decline in the past five years, the AJC says. As a result, Georgia metro areas like Albany and Columbus rank in the bottom five of 300 markets included in the Market Hotness Index.
Due in part to its heavy reliance on the federal employment, Virginia’s economy continued to grow at a slower rate than the rest of the country in 2018, according to a state report. Last year, Amazon announced one of its new headquarters offices will be located in Northern Virginia, eventually bringing 25,000 new jobs, but the new offices and jobs could take years to materialize, according to The Wall Street Journal. For now, Lynchburg, ranks last (#300) on the Market Hotness Index, with homes moving 35 percent slower than last year and 55 days slower than the United States overall. Charlottesville ranks #293, with homes moving 42 days slower than the overall U.S. market.
Whether your home is located in a hot or cool market may not matter if you really need to sell it. And, of course, it’s possible to sell a home in any state. If you understand the dynamics of the market, you may be better able to price your home appropriately and set proper expectations for how long it may take to find a buyer. By gauging your market correctly, you may be able to sell quickly and start the process of moving to your next home.
While this story identifies 10 states where individual real estate markets are hotter or cooler, your experience as a seller may be different.
Looking to look up your specific zip code? Reference the bottom map in this link.
Please share with us and other readers in the comments below.
- Have you recently sold your home, or are you considering selling your home in 2019?
- How does being in a hotter—or cooler—market affect your strategy or timing?
- What changes have you seen in the hotness of your local market?