The South appears poised to rise again.
The top 10 under-the-radar, more affordable real estate markets that are expected to see some strong home price appreciation are all below the Mason-Dixon Line, according to a recent report from the National Association of Realtors®. These are all places experiencing strong job, wage, and population growth and where homes are still affordable compared with local incomes and the rest of the country.
“They’re hidden gems because they have strong economies and strong job growth and lots of people are moving into the areas, which suggests prices should be higher. But they’re still affordable,” says Gay Cororaton, a senior economist at NAR. “So they’re hidden gems for now.” ”
To come up with its list, NAR measured wage, job, and population growth over the past three years as well as the number of housing permits over the same period in 379 metropolitan areas. The group also looked at migration and the percentage of the population aged 25 to 44 as well as the percentage of households with broadband service.
Only metros with at least 200,000 residents and positive job, wage, and migration growth were considered. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
Many of the markets on the list are benefiting from remote work as buyers feel more comfortable moving farther out into some of these cheaper, secondary cities or into new cities if they don’t have to commute to work five days a week, says Cororaton.
“A lot of these markets are close to booming, high-price areas,” Cororaton points out. “We’re starting to see demand spilling into these more affordable markets.”
All of the places had estimated property values below the national median of $297,506 in the second quarter of 2021.
The cheapest metro was Spartanburg, SC, with estimated values of $185,571. The small city, just a half-hour’s drive from Greenville, SC, and about 90 minutes west of Charlotte, NC, is home to a large BMW plant. Homes in the area are also cheaper than in Greenville, where values are about $217,459, and Charlotte, where they are nearly $100,000 more, at $280,645, according to the NAR report.
The most expensive spot was Dallas, where the estimated property value was $293,976. Dallas has become a popular destination over the past few years as large companies like Toyota and Charles Schwab have moved their headquarters to the area, and other big organizations are also expanding there. That has attracted workers who need places to live and is expected to keep housing demand high.
“The economy is driving the market,” says real estate agent Dee Evans, of Ebby Halliday Realtors in Dallas. She doesn’t anticipate prices ebbing until more new homes go up for sale. “What is pushing values is all of the people moving in, and there’s not enough inventory.”
The 10 housing markets with stronger anticipated home price appreciation (in alphabetical order):
- Dallas, TX
- Daphne, AL
- Fayetteville, AR
- Huntsville, AL
- Knoxville, TN
- Palm Bay, FL
- Pensacola, FL
- San Antonio, TX
- Spartanburg, SC
- Tucson, AZ
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