Why Buffalo will be 2024’s Hottest Market - Zillow Research
The article discusses Zillow's annual predictions for the hottest housing markets in 2024, highlighting Buffalo, N.Y., as the top market. The analysis considers factors such as expected home value growth, changes in owner-occupied households, and job growth relative to new construction. Buffalo's rise to the top is attributed to job creation outpacing new home construction and stable home values. Other top markets include Cincinnati, Columbus, Indianapolis, and Providence, which are characterized by strong economic fundamentals, fast-moving housing inventory, and stable home values.
The article notes that while mortgage rates have decreased recently, challenges such as low inventory and high prices persist. Only 15 of the 50 largest markets are expected to see home value growth in 2024, with Hartford experiencing the highest growth in 2023 at 11%, expected to drop to 0.7% in 2024. Buffalo's home values are projected to decline by 0.2% in 2024. The inflow of new listings slowed in 2023, keeping inventory low and demand high in certain markets, including Hartford, Cincinnati, and Columbus, where homes sold quickly.
Demographic trends show baby boomers and millennials as active participants in the housing market. In 2024, only 14 of the 50 largest markets are expected to see an increase in homeownership, with Columbus leading at 11.4%. Markets with negative demographic pressure include Birmingham, San Diego, and Oklahoma City. Cooler markets expected in 2024 include New Orleans, San Antonio, Denver, Houston, and Minneapolis, with anticipated home value declines and fewer owner-occupied households.
The methodology for Zillow's predictions involves analyzing forecasted home value appreciation, listing days per home, changes in employment relative to building permits, and projected changes in owner-occupied households. Data sources include the U.S. Bureau of Labor Statistics and the American Community Survey. The analysis normalizes metrics to standard deviations from the mean, with adjustments to prevent penalizing extreme data points. The final index averages these metrics, with home price appreciation acceleration down-weighted.
Overall, the article provides a comprehensive overview of the factors influencing the hottest housing markets in 2024, emphasizing economic fundamentals, inventory dynamics, and demographic trends.
