Which of the following is the most challenging, seemingly intractable pain point faced by homebuyers in 2022?
A. Surreal home prices
B. Rising mortgage rates
C. Historically high rents
D. Bone-dry home inventory levels
The answer, of course, is all of the above! But D stands above the rest.
The available homes for sale in most parts of the country are at near-historic lows, greatly exacerbating bidding wars and ensuring a perpetual cycle of rising prices.
It’s déjà vu all over again. Homebuyers who grew so frustrated with the housing market last year that they sat it out, or who weren’t able to successfully snag a home, are finding themselves in a similar, if not worse, situation this year.
Spring is usually the time more sellers put their homes on the market. Instead, the number of homes for sale fell 19% in March compared with a year ago. While that’s less of a drop than the 25% decrease recorded last month, it’s a sign the housing market isn’t getting back to normal as quickly as economists had projected.
But wait! Not all markets are created equal. As homebuyers navigate this massive shortage of homes, the Realtor.com® data team set out to find the places in the U.S. where the number of homes coming onto the market is actually ticking up relative to the local population.
Yes, there’s a caveat: In this era of endemic housing shortages, everything is relative. So while there might be more homes for sale, it doesn’t mean they’re exactly plentiful. Homes in these places are still selling quickly, and prices remain high. (Nationally, the median list price was $405,000 in March, a 13.5% year-over-year increase—and a massive 26.5% jump from just two years ago.)
We found that places that experienced massive growth over the past couple of years often had more homes to go around. This might sound counterintuitive, but as these places saw an influx of remote workers over the past few years, builders rose to the challenge. They put up new homes at a rapid pace to meet demand, so new homes coming to market are offsetting the inventory problems most cities are experiencing.
“It’s important to keep numbers in perspective,” says Ali Wolf, chief economist at Zonda, a housing research firm. Even with “a big jump in listings [in these areas] compared to last year … overall inventory is still tight compared to pre-pandemic levels.”
To come up with our list, we looked at the number of new listings per 1,000 owner-occupied households in the 300 largest metropolitan areas in March. We narrowed our findings to one metro per state for geographic diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
So where could buyers get some relief this spring? Let’s take a look.
Median list price in March: $446,000
New listings per capita: 10.55
After experiencing massive damage from Hurricane Michael in 2018, homebuilders rebuilt devastated neighborhoods and added new developments in this Florida Panhandle city. Big builders like D.R. Horton have invested here, while a local builder recently announced a planned community of 1,600 homes in Panama City Beach.
At the same time, as home prices increase, buyers who scooped up beachfront properties in the past couple of years are starting to see dollar signs, says Sean Casilli, a Realtor® with Coldwell Banker Residential Real Estate in Panama City Beach.
“People that bought even a year ago are seeing sometimes 30% to 50% appreciation on a unit they bought in a condo [building] and they’re like, ‘well, I don’t know if the market’s going to stay like this so I’ll take my short-term capital gains and run,’” Casilli says.
One example: A newly built three-bedroom townhome that sold for $209,900 in 2020 was just listed for $374,000.
Median list price in March: $387,400
New listings per capita: 9.87
Located across the bay and less than 20 minutes from Mobile, AL, Daphne was recently named a “hidden gem” by the National Association of Realtors®. People who work in the city but want more room to spread out are choosing to live here, while retirees are attracted to its prime location on the shoreline of Mobile Bay and low cost of living.
A cute, recently updated three-bedroom home on a golf course is on the market for $259,990.
And because of an abundance of flat, cheap land, homebuilders have been meeting demand. They’ve been putting up homes over the past five years or so, building out entire subdivisions in the course of a year.
Median list price in March: $343,000
New listings per capita: 9.62
This coastal city with 60 miles of prime shoreline has experienced a construction boom in recent years to keep up with all the people moving here. Builders have been putting up condos, townhomes, and single-family homes at a rapid pace in this golf and beach mecca.
During the COVID-19 pandemic, growth accelerated as a throng of people who could suddenly work from anywhere decided to do so from the beach. (Who can blame ’em?)
Second-home owners are attracted to the practically year-round warm weather while out-of-staters are attracted to the low taxes and more subdued, Southern lifestyle.
A four-bedroom home away from the beach built just a couple of years ago is listed for $380,000.
Median list price in March: $268,600
New listings per capita: 9.04
Another affordable beach area, the Jacksonville metro has long been an attractive option for second-home buyers. It’s two hours southeast of Raleigh and has a beach season that stretches from late March through early October.
It also has a big military presence, as it’s home to Marine Corps Base Camp Lejeune. A steady stream of incoming buyers makes Jacksonville an attractive place for builders, and new builds are continuing to come on the market throughout Onslow County,
“Developers are still targeting [military towns] because they see them as a good solid-growth opportunity,” says George Ratiu, manager of economic research at Realtor.com.
Lots of cheap land is also part of the appeal, and the new builds offer buyers plenty of options, including this sprawling four-bedroom home built in 2019 and on the market for just $279,900.
Median list price in March: $307,000
New listings per capita: 7.43
With comparatively low home prices and its location near the University of Iowa, Iowa City has been a popular market for first-time homebuyers. Some students decide to stay after graduation thanks to the plentiful job opportunities, and they are attracted to walkable neighborhoods near downtown.
But prices have risen here year over year, and many young sellers are looking to cash in, says Julie Dancer, a Realtor.
“It’s an opportunity for a lot of people to chase another dream, free themselves up, and know they have a wad of cash to dump into their retirement as a young person,” says Dancer, who’s with Lepic-Kroeger Realtors®.
A steady stream of new builds means there are more homes on the market compared with other places in the country, easing the inventory squeeze a bit. A three-bedroom townhome within walking distance to shops and restaurants was just listed for $336,000. But there are still too few homes for everyone that wants them.
“Last year was very difficult, this year is even more difficult,” Dancer says.
Median list price in March: $200,495
New listings per capita: 7.25
A 90-minute drive from Atlanta, Macon is filled with sprawling subdivisions where homes are about half the price buyers would pay in A-Town.
That’s not to say Macon doesn’t have its own arts scene and things to do. The downtown has experienced an economic upswing, with high-end restaurants filling empty storefronts. It’s also home to Mercer University, which keeps the area busy with sporting events and film festivals throughout the school year.
Like much of the rest of the South, Macon had experienced a pre-pandemic building boom, which has continued through today. Three- and four-bedroom homes with walk-in closets have been going up at warp speed, including this four-bedroom, 2019 build with new updates on the market for under $250,000.
Median list price in March: $297,300
New listings per capita: 6.2
The Poconos, as the larger region is called, has long been a popular escape for city dwellers in New York City and Philadelphia. However, the local economy has struggled, resulting in higher unemployment (7.2% in January) than the national average. That’s resulted in less demand for housing.
Plus, some white-collar workers who decided to live there full time are now starting to return to the office. The long commutes are causing them to consider leaving, which is freeing up more housing stock.
“We are seeing a much more determined push toward a return to the office,” says Ratiu, the manager of economic research. “Which may end up with a lot of homeowners realizing a three-hour drive from the office might not be feasible.”
At the same time, longtime residents are being squeezed by the economic downturn. Last year, the Pennsylvania State System of Higher Education announced plans to consolidate six campuses after a drop in enrollment. While that did not include East Stroudsburg University, the school saw the biggest drop in new students, according to an analysis by the Philadelphia Inquirer. And in February, FedEx closed an operations center in nearby Tobyhanna, laying off 200 workers.
Many buyers choose homes they can both live in and rent out, and with four seasons of activities, they can make a good profit. There’s not a ton of new construction here, but a three-bedroom new build in a community that allows short-term rentals is on the market for $365,900.
Median list price in March: $484,700
New listings per capita: 6.17
A little over an hour north of Denver, Greeley has been declared the next suburb of the Mile High City. As people begin to get priced out of the state capital, they’re looking for cheaper options elsewhere.
Local officials have gone all-in on building up the city over the past few years, with master-planned communities going up pretty much everywhere. A three-bedroom home that’s yet to be built is priced at $469,976.
Median list price in March: $563,600
New listings per capita: 5.91
Boise has been no stranger to our top markets list, with West Coasters and others flocking here throughout the pandemic, drawn by activities like hiking, skiing, and whitewater rafting. Boise also offers big-city amenities like a thriving food and arts scene.
While agriculture is still a dominant industry here, the tech sector is growing, with companies like HP Inc. and Micron Technology setting up shop. That’s attracting a lot of millennials and Gen X workers, but retirees are also drawn to the comparatively lower home prices.
Homebuilders have been putting up more homes in the Boise area to meet demand. A two-story townhome built just this year recently dropped in price to $378,990,
Median list price in March: $292,500
New listings per capita: 5.89
Long known for its shuttered casinos and high unemployment, Atlantic City has been making a comeback, with investors and homeowners alike attracted to killer real estate deals on some of the widest beaches in the Northeast.
Ninety minutes from Philadelphia and 2.5 hours from New York City, Atlantic City teems with tourists during the summer, so savvy buyers have been scooping up properties to flip (as well as rent out). Those properties are starting to hit the market, while sellers looking to downsize are listing their homes ahead of the peak homebuying season. New construction in Egg Harbor Township, located off the shore, is also starting to come online, easing supply issues.
For those looking to enjoy the beach, new listings have been popping up in Atlantic City proper and Avalon, NJ, says Mary Lou Ferry Wimmer, a real estate agent with Farley and Ferry Realty. Homes there can get expensive. For example, this renovated two-bedroom cottage near the water is on the market for $1.5 million.
Still, these homes are moving quickly and a lot of times with all-cash offers. That means sellers can get top dollar for their property if they decide to list.
“It’s really an opportunity for sellers that have been sitting on the fence,” Wimmer says.