Buffalo, N.Y. (WBEN) - Buffalo will be the hottest major housing market this year, according to a new analysis by Zillow.
Affordability is the most powerful force driving real estate, bringing lower-cost markets in the Great Lakes, Midwest and South regions to the top of Zillow's 2024 rankings, the company says.
"Housing markets are healthiest where affordable home prices and strong employment are giving young hopefuls a real shot at buying and starting to build equity," said Anushna Prakash, data scientist for Zillow Economic Research. "I'm cautiously optimistic that the housing market will get back on stable footing in 2024 — we shouldn't see the massive price spikes of the early pandemic or fast-rising mortgage rates of recent years."
This ranking of the nation's 50 most populous metros takes into account Zillow's forecast for local home value growth and the speed at which home sellers are entering contracts with buyers. It also considers job growth per new home permitted and growth in owner-occupied households.
Among the front-runners, Buffalo has the highest number of new jobs per new home permitted — a measure of expected demand. New jobs often mean new residents, which increases competition and drives prices up unless new construction can match that additional demand. Inventory is moving extremely quickly in Cincinnati, and Columbus is home to the fastest expected rise in owner-occupied households, an indication of family formation and population growth.
Housing costs hit record highs for both buyers and renters in 2023. This made buying and selling an expensive proposition, even for homeowners with plenty of equity.
Affordability should improve in 2024, but it is still going to be the biggest driver of the housing market. Competition for homes is already high in affordable Great Lakes and Midwest markets. Homes listed in these areas tend to go under contract faster than the national average.
Charlotte was dubbed Zillow's hottest market for 2023, and Cleveland and Atlanta also returned from last year's top 10. San Antonio took a long fall to the 49th spot, after ranking 13th last year and fourth in 2022.
