Has the arrival of spring ever seemed so overdue? Renewal! Longer days and warmer nights! This would normally be the long-awaited start of peak season for home buyers looking to purchase their first abode or trade up into a larger residence. But if we’ve learned anything since the start of the pandemic, it’s that the current housing market is anything but normal.
Unlike the traditional slow-and-steady ramp-up, the 2021 market is already moving at full throttle. And as you may have heard, home prices are continuing to go up. And up.
The backstory: Being trapped indoors because of COVID-19 forced people to rethink how and where they lived. And record-low mortgage rates have made the prospect of homeownership more affordable. So buyers rushed the market. That increase in demand, coupled with rock-bottom inventory as sellers worried about contracting the virus pulled their houses off of the market, led to home prices rising at a breakneck pace for much of last year. (Winter lull? What winter lull?) Median list prices jumped 16% in March compared with the same time the previous year, to hit an all-time high of $370,000 nationally.
While prices are rising just about everywhere, they shot up even higher in some of the more desirable—or affordable—metropolitan areas. The realtor.com® data team set out to find the places where home prices are soaring the most. Not surprisingly, smaller cities with more space, fresh air, and abundant outdoor activities are becoming more popular as are other places where buyers can live like royalty even on smaller salaries.
“These metros are a little bit smaller, a little more remote, and that’s what many movers and home buyers looked for during the pandemic,” explains Danielle Hale, chief economist at realtor.com.
Even as more people are vaccinated and some semblance of normalcy returns, high prices are likely to remain—although the pace of increases may decelerate. More listings will help, and higher mortgage rates are likely to have an impact on demand.
“As mortgage rates rise and more homeowners decide to sell this year, I expect home price growth will slow down,” Hale says.
To come up with this list, we averaged the year-over-year change in median list prices on realtor.com for the first three months of 2021, compared with the same period in 2020, in the 300 biggest metropolitan areas. We did not include metro areas that had fewer than 100 listings in March. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
So where have home prices skyrocketed?
Median list price in March: $799,000
Median list price change: 82%
Coeur d’Alene recently made the list of realtor.com’s hottest housing markets in February, jumping from the No. 62 spot last year all the way to the top 10. That’s largely due to its (relative) affordability and natural beauty. It’s also become a new haven for celebs like Henry Winkler and Kim Kardashian looking to escape the Los Angeles bustle.
Surrounded by dozens of lakes, this city in northwest Idaho is known for its water sports, especially on the beautiful and massive Lake Coeur d’Alene. Plus, hikers can explore trails in the Coeur d’Alene National Forest and Canfield Mountain.
Pickings are slim in this inventory-squeezed metro, but those looking to make the move can check out some of the new builds, such as this open-plan home with four bedrooms, 3.5 baths, and high-end finishes.
Median list price in March: $2.9 million
Median list price change: 48%
The Santa Maria metro area is an ultraluxury market that includes Santa Barbara and celeb-favorite Montecito. (Hello, Oprah, Harry, and Meghan!) Demand for more space during the pandemic has driven interest in this coastal paradise, especially from high-income folks from larger cities like Los Angeles and San Francisco looking for larger abodes during COVID-19 times.
“I have a lot of clients that are upgrading their homes and looking for more space,” says Jenna Rogers, a financial planner at Mission Wealth in Santa Barbara. “The hot-ticket price range is about $1.6 million to $2.5 million.”
As more buyers scoop up these massive mansions, that’s inflating the overall median price in the Santa Maria metro area. Still, Rogers says that’s not deterring buyers from flooding the market.
People from major cities “want to live somewhere near the ocean with a European lifestyle, where everything is walkable,” she says.
The most prized real estate here, of course, are the homes with a Pacific view, but there are more affordable (relatively speaking) options a bit inland, such as this three-bed, 2.5-bath home with a nice yard and fruit trees galore for $2.4 million.
Median list price in March: $285,000
Median list price change: 43%
Home to the Pocono Mountains, the East Stroudsburg area is a popular vacation destination for New Yorkers and people from nearby New Jersey. The Poconos, as the larger area is called, offers forest trails for hiking, lakes for swimming and boating, as well as ski resorts for the winter months. Those who prefer the indoors can check out the many casinos in the area.
During the pandemic, city dwellers looking for more breathing room and reasonable real estate prices descended on the area, scooping up the few homes that were available. Interest has been nonstop since last summer, and sellers have taken advantage of the action, pricing their homes well above what they would have listed at just a year ago.
There are a surprising number of contemporary homes in this area, including this well-maintained cottage, complete with four bedrooms, two bathrooms, and easy access to Interstate Highway 80.
4. Billings, MT
Median list price in March: $428,500
Median list price change: 41%
Before the pandemic, the Northwestern states had been growing in popularity because of the abundant space and dozens of outdoor activities to choose from. In the past year, that trend has accelerated, as out-of-state buyers flood places like Billings to practice social distancing in style.
Buyers coming from places like California and New York are generally able to afford higher prices and are more willing to bid over asking, sending prices skyward in this former railroad town. Billings is now better known for its oil refineries and coal reserves, but also offers easy access to Yellowstone National Park for those looking to become one with nature.
The median home price here goes far, as seen in this two-story home with a wraparound porch, swimming pool, and home gym for $439,900.
5. Boulder, CO
Median list price in March: $912,500
Median list price change: 40%
Nestled along the foothills of the Rocky Mountains, about 40 minutes from Denver, Boulder is a college town that has something for everyone. Home to the University of Colorado Boulder, there are lots of hiking and outdoorsy adventures along with good restaurants and bars. Demand has increased thanks to its natural beauty and more tech companies expanding and moving in.
But the city will not allow for dense development, so prices continue to rise.
“While it’s still a hippy city at heart, it has become financially unobtainable for many,” says Jenny Usaj, co-owner of Usaj Realty.
Demand here is expected to remain high, especially after Google announced it would be expanding its footprint in Boulder this year, adding more offices and bringing in more workers in the coming months.
6. Austin, TX
Median list price in March: $520,000
Median list price change: 36%
The real estate market in Austin has been on fire the past few months, with the city emerging as one of the hottest markets during the pandemic.
Texas’ low costs and lower taxes are attracting more corporate jobs than ever to the state’s capital. Last year, more than 100 Austin-based companies announced expansion plans, while 45 companies from out of state said they would make the city home.
Meanwhile, millennials who could suddenly work from anywhere were drawn to Austin for its music scene and hipster lifestyle. Austin has become a tech hub in its own right in recent years, but now tech workers from the San Francisco Bay Area are making the move to push their Silicon Valley salaries even further.
Even with its rising prices, Austin has managed to remain way more affordable than other alluring big cities like San Francisco and Manhattan—partly by building tens of thousands of apartments over the past decade.
7. Tupelo, MS
Median list price in March: $278,500
Median list price change: 35%
Record-low mortgage rates and few homes on the market are largely behind rising prices in the birthplace of Elvis Presley. Younger buyers, including millennials purchasing their first homes, are able to make their money stretch further. That’s causing fierce competition, sending prices higher.
Located less than two hours between more expensive cities like Memphis, TN, and Birmingham, AL, people who no longer have to go to the office every day are more willing to make the long commute, especially if it means they can save money in the long run.
For the outdoorsy types, Tupelo is home to the Natchez Trace Parkway, a historic forest trail that extends roughly 440 miles from Nashville to Natchez, MS. For city folks, weekend festivals are also commonplace here, including the annual Elvis Festival that takes place in June.
If it’s Southern charm you’re looking for, there are plenty of homes that fit the bill, including this classic two-story home, complete with four bedrooms, 2.5 baths, and 12-foot ceilings. Situated on a 3.5-acre lot, it dates to 1886.
Median list price in March: $581,500
Median list price change: 33%
Another vacation hot spot, Pittsfield is located in the Berkshires, a mountain region in Western Massachusetts. Filled with quaint villages and towns, the Berkshires are known for abundant outdoor activities like hiking, mountain biking, and skiing. The area boasts a great food and arts scene, including the annual Berkshire International Film Festival.
Single-family homes are in high demand, especially for people looking to escape urban centers like New York and Boston during the pandemic. The surge is expected to continue through the spring and summer, though more people may be willing to list their homes in the coming months.
9. Bend, OR
Median list price in March: $589,450
Median list price change: 33%
Bend has long been a vacation town for Portlanders looking to get out of the city and enjoy the outdoors. It’s a small city, located along the Deschutes River—perfect for fly-fishing—and along the Cascade Mountains, home to ski resorts and mountain trails. You like craft breweries? You’re in the right place
What does the median home price get you in this area? Well-appointed places like this one with an open kitchen, quartz countertops, and a built-in wine fridge.
10. Sioux City, IA
Median list price in March: $274,950
Median list price change: 32%
After being cooped up at the start of the pandemic, buyers have been purchasing homes at a quick clip in Sioux City. But locals are also competing against out-of-state buyers from the coasts, including California, says Rob Valdovinos, a Realtor® at Century 21 ProLink in Sioux City.
With white-collar workers able to work from anywhere, that’s attracting people who may have left the Midwest for jobs on the coasts. Located on the border of Iowa, Nebraska, and North Dakota, at the head of the Missouri River, Sioux City offers a lower cost of living than other parts of the country. But with few available homes to choose from, listings move quickly and usually end up selling above the asking price.
“Any house [that’s listed] is getting more than three to five offers,” Valdovinos says.