The No. 1 Housing Market To Watch Is One Most Americans Probably Haven’t Heard Of

The No. 1 Housing Market To Watch Is One Most Americans Probably Haven’t Heard Of

When most folks think of the nation’s top housing markets to watch, Rockford, IL, probably doesn’t come to mind.

However, the midsized city in northern Illinois topped the annual Wall Street Journal/Realtor.com Housing Market Ranking. The list identified some of the strongest housing markets in the nation that are poised to continue growing in the coming months.

“These are places where prices are picking up relatively quickly, demand is higher than we see in other parts of the country, and where homes aren’t spending long on the market,” says Hannah Jones, senior economic research analyst at Realtor.com®. “They also boast strong economies and a great variety of things to do.”

The ranking looked at the 200 largest metropolitan areas and weighed real estate demand; housing inventory; median days on the market; price trends; property taxes; climate risks; unemployment rate; wages; regional price parities; percentage of foreign-born residents; small businesses; amenities; and commute times in these areas.

These places also offer more affordably priced housing. Three-quarters of the top 20 markets boasted price tags below the national median list price of $424,900.

More than half of the cities were in the Midwest, with five in Ohio and a few in the Northeast and the South. Not a single market on the list was in the West.

“A lot of these areas are suffering from low inventory, so buyers are more likely to see more competition and prices are likely to rise,” says Jones. “These are also areas that have lower exposure to extreme climate risks over the next 30 years.”

Rockford, located about 90 miles northwest of Chicago and 90 miles southwest of Milwaukee, boasted one of the lowest median home prices on our ranking. The typical home in the metro was listed for just $235,000 in March.

“The reason it’s so hot is the lack of inventory,” says local real estate agent David Dale Johnson, of Berkshire Hathaway HomeServices Crosby Starck Real Estate.

The area is home to several hospital systems, an aerospace industry, and manufacturing jobs. However, the unemployment rate in the city, 6.8%, was higher than the national average of 3.9% in February, according to the Bureau of Labor Statistics.

“A lot of our buyers are coming out of the Chicago metro area,” says Johnson. “For the buyers who can work from home several times a week or maybe entirely, they’re finding it much more affordable to live in the Rockford area and commute to Chicago.”

Homes in the Rockford area were about 37.3% cheaper than in Chicago, where the typical home cost $374,900 in March.

But Rockford isn’t exactly an easy market for buyers. Homes priced below $225,000 often receive multiple offers, says Johnson.

“The lower the price, the more offers,” he says. “As a general rule, the house is going to sell for full price or more.”

In Fort Wayne, IN–another Midwestern market, which nabbed the No. 6 spot in the ranking—competition is still brisk for homes priced below $300,000.

Real estate broker Beth Walker, of Fairfield Group Realtors, is seeing multiple offers and offers over the asking price for these homes as first-time buyers and investors battle it out.

“It’s tough,” she says, noting that some buyers use escalation clauses while others are waiving home inspections and appraisals to gert their offers accepted. “Sometimes they’re having to make more than one offer on a home.”

Take a look below at the full ranking and the median home prices in those cities.