Is the Midwestern Housing Boom Getting Too Hot?
August 14, 2019
The heartland is seeing a rise in home sales and more buyers in search of affordability swooping in. That has prompted midsized cities like Boise, Idaho; South Bend, Ind.; and Columbia, Mo., to pop up higher on top-performing real estate markets.
Overall, only 10 of 178 metro areas saw double-digit annual price increases during the spring selling season—down from 24 a year prior, according to data from the National Association of REALTORS®. Nearly all of the highest growth areas were in less pricey, smaller markets.
“We’ve seen this shift to the center of the country,” Glenn Kelman, chief executive of Redfin, told The Wall Street Journal. “It used to be flyover country, and now it’s saving our bacon.”
For the past year, employment and wages have both been growing across the country. Mortgage rates have also been the lowest since 2016. Yet existing-home sales have been underperforming, with existing-home sales down 4% year over year.
“Some of those [smaller] markets never saw a big boom coming out of the recession,” Ralph McLaughlin, deputy chief economist at CoreLogic Inc., told WSJ. “This may be a rising tide finally reaching some of these secondary markets.”
Several markets in the Midwest have heated up so quickly that they are now seeing shortages of homes for sale and rising home prices, notes Anthony West, a real estate professional in Kansas City, Mo. As in the case for larger, formerly hot markets, some first-time buyers may get shut out as competition heats up, real estate pros say.
“In Boise and Grand Rapids, the Housing Market Looks Red Hot,” The Wall Street Journal (Aug. 11, 2019) [Log-in required.]
Updated: November 12, 2019