Everyone’s heard stories of those fortunate few who purchased homes for peanuts and then sold them years later for double or even triple what they originally paid for them. And just about every homebuyer out there is hoping they achieve the same lofty feat.

While it’s impossible to time the market, there are certain parts of the country where home prices are rising faster than others that have markets that are expected to remain strong going forward. So those looking for up-and-coming housing markets might want to head to Indiana.

The top three promising real estate markets in the nation are in the Hoosier State this summer, according to the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index.

“Indiana housing markets offer home shoppers low prices, really strong economies, and good job prospects,” says Hannah Jones, an economic data analyst at Realtor.com. “These markets didn’t see the boom in popularity that many markets did during the [COVID-19] pandemic, so now is their time to shine. They’re now seeing high price growth, but they’re starting from a much lower point from other markets.”

The index identified the top markets for both buyers and investors out of the 300 largest metropolitan areas. It looks at metros with strong housing demand based on page views of local listings, the number of homes for sale, property taxes, and median days homes sit on the market before a sale. It also factors in metros with robust economies, lots of well-paying jobs, a good quality of life, and desirable amenities such as lots of small businesses and reasonable commutes to work. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

Today’s homebuyers are scouring the country for good value. It’s not hard to figure out why. Home prices have fallen only 0.9% from last June’s record-high median list price, and mortgage interest rates are nearing 7%. Just four of the top 20 emerging markets on the list have prices above the national median of $445,000—and those markets are cheaper alternatives to larger, nearby cities.

The real estate markets on this list tend to be smaller, more affordable destinations in the Midwest with strong job markets. Those lower prices have proven to be a strong draw for out-of-towners.

“Buying a home is not feasible for many buyers in a lot of areas, but these markets offer affordable prices and a good quality of life,” says Jones.

However, home prices in these markets are on the rise. They were up an average 25% in the top 20 emerging markets—compared with about 8.9% in the 12 months ending in June 2023. And there are fewer homes going up for sale in these up-and-coming real estate markets. Those that do are selling quickly.

What’s so special about Indiana?

The four Indiana metros that made the list—No. 1 Lafayette, No. 2 Fort Wayne, No. 3 Elkhart, and No. 9 South Bend—are all within a few hours of one another. They also boast home prices that are roughly $90,000 to $160,000 less than the national median price.

The Lafayette metro area, which topped the list for the second time in a row, boasts a median home price of $355,000—about 20% less than the national price tag. The city was named after American Revolutionary War hero Marquis de Lafayette.

However, two years ago, buyers could find a small ranch with a one-car garage for $100,000. Now, they’ll be paying at least $200,000 for the same house—if they can get an offer accepted, says real estate broker Jennifer O’Shea, at Keller Williams Indy Metro Northeast.

“The housing market is really tight. There’s not a lot of building going on,” she says. “It is crazy. I’ve never seen anything like it.”

Since April, she’s written seven offers for a client who still hasn’t had one accepted. Her client is competing against local buyers, those coming in from out of state, and investors making cash offers.

The area is a manufacturing hub about an hour northwest of Indianapolis and two hours southeast of Chicago. Some of the local more recognizable employers include Caterpillar, Subaru, and Purdue University. More than 50,000 students enrolled in the West Lafayette school last fall, making it one of the largest universities in the nation.

“We were really a cheap market two years ago, and now we’re becoming less affordable,” says O’Shea.

Top 20 emerging real estate markets in summer 2023:

1. Lafayette, IN (median home list price of $355,000 in June)
2. Fort Wayne, IN ($350,000)
3. Elkhart, IN ($285,000)
4. Bloomington, IL ($331,000)
5. Sioux City, IA ($342,000)
6. Columbus, OH ($399,000)
7. Topeka, KS ($298,000)
8. Johnson City, TN ($422,000)
9. South Bend, IN ($292,000)
10. Kingsport, TN ($342,000)
11. Manchester, NH ($535,000)
12. Knoxville, TN ($475,000)
13. Columbia, MO ($398,000)
14. La Crosse, WI ($337,000)
15. Portland, ME ($626,000)
16. Akron, OH ($226,000)
17. Oshkosh, WI ($334,000)
18. Milwaukee, WI ($380,000)
19. Jefferson City, MO ($267,000)
20. Norwich, CT ($537,000)

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