Lafayette, Ind. tops the list of emerging residential real estate markets, according to a study by the Wall Street Journal and Realtor.com.
The WSJ/Realtor.com Winter 2023 Emerging Markets Index analyzes key housing market data, as well as economic vitality and lifestyle metrics, to surface emerging housing markets that offer a high quality of life and are expected to see future home price appreciation.
“The Lafayette-West Lafayette area is a manufacturing hub whose workforce also contains a higher share of government workers,” the study notes. “The typical home listed for sale in December was priced under $300,000, a nearly 25% discount over the December national median home list price of $400,000. While the population is more mobile, its share of out-of-state home buyers is modestly lower than the 300 market average. In addition to Purdue University sporting events and outdoor offerings, Lafayette-West Lafayette is home to gardens, museums, a Frank Lloyd Wright designed home and other cultural attractions.”
Lafayette is followed by Ft. Wayne, Ind.; Elkhart – Goshen, Ind.; Topeka; Johnson City, Tenn.; Columbia, Mo.; Kingsport – Bristol, Tenn.-Va.; Savannah; Columbus; and LaCrosse-Onalaska, Wisc./Mn., which rounds out the top 10.
Spots 11 through 20 the index are claimed by Manchester, N.H.; Burlington, N.C.; Portland – South Portland, Me.; Knoxville; South Bend – Mishawaka, Ind.; Sioux City; Springfield, Ill.; Springfield, Mo.; Milwaukee – Waukesha; and Rapid City, S.D.
Eight of the Winter 2023 markets were also on the Fall 2022 list, including Lafayette-West Lafayette, Burlington, N.C., Johnson City, Tenn., and Columbus, Ohio. Twelve market fell off the list this quarter, with Cape Coral-Fort Myers, Fla., and Naples-Immokalee-Marco Island, Fla., falling 164 spots and 171 spots, respectively. And the markets that dropped off last quarter’s top 20 are mostly in the South, with five in Florida alone, as well as Columbia, S.C., Fayetteville-Springdale-Rogers, Ark.-Mo., Nashville-Davidson-Murfreesboro-Franklin, Tenn., and Raleigh, N.C.. Out west, Visalia-Porterville, Calif., Colorado Springs, Colo., and Yuma, Ariz. all fell off the list as well.
“As economic conditions have changed and mortgage rates rise sharply, expensive markets have fallen out of favor, replaced by low-priced Midwestern markets,” the study says.
Seven of the top markets saw the number of homes climb faster than the national average, including the top three (all in Indiana): Lafayette-West Lafayette, Fort Wayne, and Elkhart-Goshen. The emerging markets also are smaller than in previous quarters, with just two (Columbus and Milwaukee) boasting more than one million residents. All but one of the top markets had an unemployment rate below the 300 market average (3.6%).