The National Association of Realtors (NAR) has identified 10 U.S. housing markets that it expects to outperform the rest of the nation over the next three to five years — and it’s a diverse list.
The Dallas-Fort Worth metroplex — fourth among U.S. metro areas in population — is the largest market on the list. But it’s also joined by five other emerging large metro areas: Las Vegas; Tampa; Charlotte; Raleigh-Durham-Chapel Hill, North Carolina; and Columbus, Ohio. The other four markets aren’t yet “18-hour cities” that offer plentiful services, amenities and job opportunities, but they have seen mounting growth over the past few years: These markets are Charleston, South Carolina; Ogden, Utah; and the Colorado cities of Fort Colins and Colorado Springs.
NAR identified the 10 metros based on a variety of factors, including home-price appreciation, housing affordability for new residents, domestic migration, job growth relative to the national average, population age structure and attractiveness for retirees.
“Potential buyers in these 10 markets will find conditions especially favorable to purchase a home going into the next decade,” said NAR president Vince Malta. “The dream of owning a home appears even more attainable for those who move to or are currently living in these markets.”
All 10 of these cities also are in regions that are drawing new residents from more expensive areas. Nevada, Utah, Colorado and Texas are trendy destinations for potential homebuyers who are fleeing the high real estate prices of California and the Pacific Northwest, while the Southeast region remains popular with Northeastern house hunters who are not only looking for lower prices, but better weather as well.
“Drawing new residents from other states will also further stimulate housing demand in these markets, but this will create upward price pressures as well, especially if demand is not met by increasing supply,” said NAR chief economist Lawrence Yun.
NAR’s numbers support these metros’ status as popular destinations. Movers flock to all 10 cities at higher rates than the average of the country’s 100 largest metro areas. In Colorado Springs, for example, recent moves accounted for 21% of the total population. In Fort Collins, it’s 17%, while in Las Vegas, it’s 16%.
These cities also are attracting various age groups. For example, 11% of recent relocations to Tampa were 65 years and older, while in Durham, North Carolina, 54% of recent movers were between the ages of 18 and 34.
In seven of the 10 metros, according to NAR, between 40% and 60% of recent movers who are renting can afford to buy a home, assuming a 20% downpayment. But prospective homebuyers looking to take advantage should make their move soon. Strong job growth is helping drive up prices, with payroll employment rising annually by an average of about 2.5% across the 10 cities over the last three years. That’s higher than the national rate of 1.6% — and in Ogden, Las Vegas, Dallas and Raleigh, annual job growth increased by about 3% over three years.