Buffalo, Grand Rapids and Omaha Are Now the Nation’s Fastest Housing Markets
The typical home in these affordable, inland metros spends less than 30 days on market.
Buffalo, New York; Grand Rapids, Michigan and Omaha, Nebraska—all areas where the typical home costs less than the national median—were home to the fastest housing markets in the country in January. Contrast that list of metros with the fastest markets from a year ago: San Jose, Seattle and Oakland, some of the most expensive in the U.S.
Buffalo and Grand Rapids were the fastest markets, with the typical home that sold in January on the market for 28 days before going under contract in each metro area. In Buffalo, that’s seven days faster than last year and in Grand Rapids it’s two days slower. Omaha was the third fastest market at a median 29 days in January, flat from last year. San Jose is now the 28th fastest metro, with the typical home going under contract in 46 days.
Other signs also indicate that the Buffalo, Grand Rapids and Omaha housing markets are heating up. Home prices rose faster annually in January in all three areas than they did nationwide, and supply in each metro was either flat or down, compared with a 6.3 percent increase nationally.
“During the recession, job seekers migrated to employment hubs like the Bay Area and New York to find work,” said Redfin chief economist Daryl Fairweather. “But now that unemployment is low across the nation, workers have the opportunity to move to small, affordable cities, like Buffalo, Grand Rapids and Omaha, without sacrificing job security.”
|January 2019 housing statistics for Buffalo, Grand Rapids and Omaha|
|Metro area||Days on market||YoY change in days on market||Median sale price||YoY change in median sale price||YoY change in home sales||YoY change in inventory||Sold above list price||YoY percentage point change in sold above list price|
|Buffalo, NY||28||-7||$141,000||4.1%||-21.9%||0.7%||33.6%||3.2 pts.|
|Grand Rapids, MI||28||2||$192,000||7.9%||-7.7%||-12.7%||27.4%||0.8 pts.|
|Omaha, NE||29||–||$191,500||5.5%||-20.2%||+0.1%||18.2%||-9.9 pts.|
One thing that Buffalo, Grand Rapids and Omaha have in common: Local Redfin agents note that more and more homebuyers are moving in from big, expensive cities—and as more people move in, homes go off the market faster and prices rise.
Thanks to a revitalized community and relatively low housing costs, Buffalo is newly attractive to young people moving home
Buffalo residents and people moving into town are excited about its resurgence, a feeling that’s reflected in the housing market in the most desirable neighborhoods and suburbs, said local Redfin agent Lesley Lannan. But even though home prices are going up, they’re still lower than they are in most parts of the country.
“While the current inventory shortage, paired with strong demand, is resulting in bidding wars, quick sales and rising prices, most local homebuyers still find that their dream home is within reach. In many parts of the country that’s no longer true, even for well-employed professionals,” Lannan said.
For decades, Buffalo suffered from “brain drain,” with many young adults who’d grown up in the area moving away to bigger cities for college and jobs, and few returning to raise their own families. But in the past few years, Lannan has helped more and more young professionals move back to their hometown of Buffalo after starting their careers elsewhere. “Young people are coming back now because the community has been revived, the cost of living and housing is relatively low and maybe they’re having children and want to be close to family,” Lannan said. “I’m seeing people move back from coastal cities like San Diego, San Francisco, Washington, D.C., Boston and New York City.”
“Right now, I’m telling buyers and sellers to make their moves sooner rather than later to take advantage of relatively low interest rates before certain areas start to see prices rise much further,” Lannan continued.
Lannan said she expects most parts of Buffalo to remain affordable even as the area sees a cultural resurgence and developers build new residences in the downtown area. “Buffalo’s economy is improving, but our unemployment is still higher than average and wages are less than elsewhere. I think that will limit the astronomical inflation in housing that other communities experienced because there isn’t the income to support it,” she said.
Grand Rapids is a haven for people moving in from more expensive places like Chicago and cities in California
Shellie Silva, a Redfin agent in Grand Rapids, said the housing market has been growing rapidly since she moved to the area from San Diego three years ago. The buyer pool in the area is made up largely of people moving from Chicago, and she has also met with buyers from California and Hawaii. One reason for the area’s popularity is its relative affordability.
“A lot of homebuyers in Grand Rapids have reverse sticker shock when they come to town. They can’t believe how affordable the homes and property taxes are,” Silva said. “Homebuyers in Grand Rapids joke about buying two homes because they’re so affordable compared to other parts of the country. In fact, many of them are able to own more than one home in Michigan: One right in town and a getaway cottage for the summer.”
“Aside from how affordable housing is compared to the coasts, there are a lot of reasons why Grand Rapids is becoming more and more popular,” Silva continued. “We have highly rated schools, a low unemployment rate, amazing medical facilities and good old-fashioned Midwestern charm. In the three years I’ve lived in the area, a lot of new restaurants, breweries and shops have opened up, making the quality of life even better than it already was.”
While the Grand Rapids housing market is inexpensive compared to coastal cities, local residents are noticing the rising prices and homebuyers from inside and outside the region are becoming more concerned about bidding wars at entry-level price points, Silva said. On the selling side, clients are pleased that their home values are going up. She’s advising sellers that even though prices are rising, it’s important to price their homes realistically if they want to sell quickly like their neighbors did last month. And buyers should enter the market with a clear picture of which features they must have in a home and which they’re willing to compromise.
Omaha is in the midst of a massive facelift, making it more and more popular for people seeing affordable alternatives to expensive cities
Dakotah Smith, a local agent in Omaha, said a lot of homebuyers are moving into the area from places like Chicago, Washington, D.C., and Denver. Smith himself moved to Omaha from Washington, D.C., several years ago because of its relative affordability and good job market. He says he continues to be excited by Omaha’s “new era.”
“Everyone who visits Omaha is floored by the quality of our restaurants, breweries and beloved zoo. Over the last four years, whole new entertainment districts have popped up out of almost nowhere,” Smith said. “The Blackstone District was built from scratch and it’s a go-to for great dining and cocktails. The brand-new Capitol District is a major project with new restaurants and bars. Older neighborhoods like the Benson district and North Omaha are getting new life. And to top it all off, major new mixed-use developments are sprouting up from the cornfields in the suburbs.”
The city’s resurgence is one reason for its rising home prices and fast market. Another factor is that new construction hasn’t kept up with demand, which means there’s a shortage of entry-level homes on the market, Smith said. “For new homebuyers and local residents, the hot market and higher prices are something to get used to. Buyers need to hurry to see homes and put offers on them,” he said.
“For the buyers I work with, I stress the importance of getting out to tour early, before they may be ready to make a decision,” he continued. “”Buyers need time to educate themselves on what the market has to offer and what they can afford. That way, when someone does find their dream home, they’ll be prepared to move quickly.”
Here’s more information on January’s housing market, which spotlights national and regional trends.
The post Buffalo, Grand Rapids and Omaha Are Now the Nation’s Fastest Housing Markets appeared first on Redfin Real-Time.