Photo: Robert Clark
After many months of consecutive national inventory declines, US homebuyers are beginning to venture outside of the suburbs in their quest to find an affordable home.
These “secondary” markets are quickly gaining favor with homebuyers because they’re offering something their metro areas can not — relative affordability, a greater inventory of for sale homes, and more job opportunities. That’s according to a recently released report by realtor.com.
Inventory has fallen for the last 41 months in a row, while home prices have remained on an upswing — although price growth has begun to slow. The biggest factor prompting more buyers to look beyond their own backyard is simply affordability — there are more homes for sale beyond the lines of their metro area.
In the past, the suburbs have offered a respite from the higher prices in more urban areas. “But with today’s record highs even the suburbs have gotten pricey, which has demand flooding outward as options disappear and prices move further out of reach in top job hubs,” Javier Vivas, director of economic research at realtor.com, says in the digital release.
Many of tomorrow’s hottest markets are located just outside of today’s white-hot ones. For example, in Spokane, WA — currently “the” market to market to watch, according to realtor.com — the median home value is $264,000, well below the median listing price of $500,000 in the nearby Seattle metro area.
Another factor driving more buyers to these secondary markets is the availability of more homes for sale. Some 1.3 percent of all homes in these secondary markets are for sale, compared to 0.9 percent of homes in the top 100 largest markets.
And when you compare housing availability in the markets driving demand to these secondary markets, the difference is even more pronounced.
In Florida, the Deltona and North Port areas have 2.1 and 2.2 percent, respectively, of total inventory available for sale, compared to the larger nearby Orlando market with 0.9 percent of homes available for purchase. The New York market, which also drives many “snowbird” homebuyers to the more affordable Florida market, has 0.8 percent of inventory available for sale.
Many of these secondary markets also offer strong employment prospects. In most of the top secondary markets studied by realtor.com, the unemployment rate averaged 3.9 percent, which is below the national average of 4.1 percent.
Additionally, annual employment growth in these markets is expected to be around 1.8 percent, compared to an average of 1.3 percent in the larger metro areas.
The top secondary markets that made the “markets to watch in 2018” list include, in ranking order: Spokane, WA, Portland, ME, Knoxville, TN, Deltona, FL, Boise, Idaho, Jacksonville FL, Charleston, SC, Northport, FL, Bakersfield, CA and Chattanooga, TN.
“These markets offer affordable housing options and a chance to move up for those who are willing to change jobs or take on longer commutes,” says Vivas.
Click here to read the entire release.