No questions asked: despite the uncertainty of the past two years, the United States residential market is the hottest it has been in years. Meanwhile, last month’s real estate data shows that the rise in home purchasing will not end anytime soon. Believe it or not, some markets have seen a 50% increase in home prices over the last year. Today, the median home price in the United States stands at a record-setting $350,000. And it looks like it will continue to rise, especially in the hottest real estate markets in America!
What’s Causing the Boom
Why is the United States housing market so hot right now? Well, millions of people have decided to move away from the most expensive cities in America, particularly those on the coast. Cities like New York, Los Angeles, Portland, and San Fransisco have seen drastic drops in population. Citizens from big cities have started picking up houses in smaller, inland communities, which are much cheaper. Meanwhile, low mortgage rates have also encouraged potential buyers to take the home-buying plunge.
Finally, working from home has also caused many to consider buying a bigger place. As you likely know, the COVID-19 pandemic led to the shutdown of many office buildings across the States. Now, many are planning to work from home permanently, never returning to the office. This has not only led to more mobility, but also a desire for bigger homes where one can set up a home office outside of the bedroom.
Plus, many are buying a second home! “Those who have been very successful, who kept their jobs, and [who] saw the stock market go through the roof cashed out their gains to use that as their down payments to buy a second home,” the chief economist at CoreLogic, Frank Nothaft, explained.
So, in this hot American housing market, what places are blazing the brightest? Well, the answers might surprise you…
The Hottest Housing Markets
Every year, Realtor.com releases a list of the “Hottest Luxury Real Estate Markets in America Right Now,” which shows not only the hottest markets in the country, but also where home prices are rising the most. And this year’s list might surprise you. For the first time, inland cities like Prescott, Arizona, and Salt Lake City, Utah, have entered the list. While they are at the bottom of the list, the median price of their top 1% of homes hit $5.7 million and $4.2 million, respectively.
Portland, Maine, Austin, Texas, Barnstable, Massachusetts, Wilmington, North Carolina, Hilton Head, South Carolina, Sebastian, Florida, and Kahului, Hawaii (seen above), rounded out the list from eighth to second. While the coasts are losing a large portion of their populations, it’s clear that they are still the top place to go if you want a luxury home. However, California has claimed the number one spot, with many moving out of its biggest cities, like San Fransisco and Los Angeles, to the growing town of San Luis Obispo.
While San Luis Obispo was first settled back in 1772, it has recently enjoyed massive growth. Now, the median price of its top 1% of homes sits at a whopping $40 million. Still, in the coming years, you can expect more and more inland state cities to enter the list, as even more people move away from the coast.