Top housing markets this fall are those with affordable homes
Low-cost cities with strong economies, such as Johnson City, Tenn., lead third-quarter rankings in WSJ/Realtor.com housing index
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Home-buying demand remained robust in low-cost cities with strong local economies in the third quarter, helping lift Johnson City, Tenn., to the top of The Wall Street Journal/Realtor.com Emerging Housing Markets Index.
Rising mortgage rates have made most home purchases less affordable and pushed many buyers out of the market. Existing-home sales dropped for eight straight months through September. Homes are sitting on the market longer, and more sellers are cutting prices.
Buyers’ focus on affordability benefited Johnson City. The metro area’s median listing price was $379,000 in September, up 27% from a year earlier, according to Realtor.com, while median list-price growth nationwide was 14%. Johnson City’s median listing price was $48,000 below the median listing price nationwide last month.
Frankfort, Kentucky, skyline on the Kentucky River at dusk. (iStock) (iStock / iStock)
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The index identifies the top metro areas for home buyers seeking an appreciating housing market, a strong local economy and appealing lifestyle amenities. News Corp, parent of the Journal, operates Realtor.com.
Johnson City, a metro area of about 205,000 people, was followed in the rankings by Visalia, Calif.; Elkhart, Ind.; North Port, Fla.; and Fort Wayne, Ind.
"These more affordable markets continue to offer some opportunity," said Danielle Hale, chief economist at Realtor.com. "It doesn’t mean that they’re not seeing a slowdown in their housing markets, but they’re better positioned generally."
The Wall Street Journal/Realtor.com Emerging Housing Markets Index ranks the 300 biggest metro areas in the U.S. In addition to housing-market indicators, the index incorporates economic and lifestyle data, including real-estate taxes, unemployment, wages, commute time and small-business loans.
Drone aerial footage of Downtown Chattanooga, Tennessee, skyline. (iStock)
Most of the top-ranked markets in the third quarter had faster home sales and lower unemployment rates than the market as a whole, Ms. Hale said.
Johnson City, which sits in northeast Tennessee near the North Carolina and Virginia borders, had the highest demand ranking of all 300 metros in the index.
Downtown Johnson City is the heart of a metro area that is home to about 205,000 people.
The community, which has an unemployment rate below the national average, has been attracting home-shopping activity from more expensive cities in the state and East Coast hubs such as Washington, D.C., Atlanta and Charlotte, N.C., Ms. Hale said. Major local employers include East Tennessee State University and Johnson City Medical Center, and the area offers easy access to the Appalachian Trail and water sports.
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Courtney Shaw of Re/Max Checkmate Inc. Realtors in Johnson City said that since the start of the pandemic she has worked with buyers from Oregon, California, New York and other states who were drawn to the area’s home prices, low taxes and hiking in the nearby mountains.
"They were selling for profits in their states and coming here where everything is much more affordable," she said. Many of the new arrivals were retirees, while others were remote workers, she said. "A lot of folks that come here tell me that high-speed internet is a main factor for them," she said.
Like many cities and small towns during the pandemic, Johnson City and local organizations started a program offering $2,500 or more to full-time remote workers who relocated to the city. About 280 people have applied to the program and 40 have been accepted so far, said Alicia Phelps, executive director of the Northeast Tennessee Tourism Association.
Home-buyer demand in the area has dropped because of higher mortgage rates, but the market is still competitive, Ms. Shaw said. Her most recent listings, one in September and one in October, both received multiple offers, she said.
Tampa, Florida, skyline on a sunny mid-afternoon day. (iStock) (iStock / iStock)
Five of the top 20 markets in the third quarter were in Florida, including North Port in the No. 4 spot, Tampa at No. 11, Cape Coral at No. 12, Naples at No. 16 and Orlando at No. 18. Most of the data used in the index captures the period before Hurricane Ian made landfall in Florida in late September and caused billions in property damage.
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Some Western markets that were highly ranked last quarter fell in the third-quarter rankings, including Boulder, Colo., Santa Cruz, Calif., Vallejo, Calif., and Eureka, Calif. Coeur d’Alene, Idaho, which topped the inaugural Wall Street Journal/Realtor.com Emerging Housing Markets Index in the first quarter of 2021, placed 23rd in the most recent rankings.