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A midsize town in Georgia about 75 minutes by car from Atlanta is the nation’s hottest real estate market, as a tide of renters flee pricey cities in search of homes in more affordable places.
That’s the takeaway from a new Bankrate analysis of nearly 200 housing markets around the country. The personal finance website ranked the top most attractive and active housing markets and found that Gainesville, Georgia, was No.1. Bankrate based its ranking on data-based factors such as which cities had the strongest job growth, fastest rising population, largest home value appreciation, lowest unemployment rate and fastest rate of homes for sale in the area being snatched up.
While Gainesville took the top spot, Knoxville, Tennessee; Fort Myers, Florida; Sarasota, Florida; and Charlotte, North Carolina, rounded out the top five.
Those cities have become particularly attractive to house hunters who have been priced out of expensive metros, said Bankrate analyst Jeff Ostrowski.
“The momentum in the housing market has shifted to the Sun Belt, and especially to Georgia, the Carolinas and Florida,” Ostrowski said in the analysis. “While many parts of the U.S. are experiencing price declines, home values have held steady in the Southeast.”
Why Gainsville?
Bankrate said Gainesville ranked No. 1 because homes in the area have appreciated 40% in one year, higher than any other location in the analysis. Job growth there grew 15% as did population growth, Bankrate said, citing data from the U.S. Census and U.S. Labor Department.
Gainesville’s home prices are also less expensive than the national median. The city’s median home sales price for Gainesville hit $375,000 last month, compared to the national median of $430,000, according to Realtor.com.
Home prices have indeed played a major role in how little buying has taken place so far this year. What was initially forecasted by economists as a frenzied spring season has turned into anything but as homeowners have opted to stay put — thus creating an inventory shortage of homes for sale. As a result, the few homes that are available are becoming less affordable to middle-income families.
Higher prices have created “a very distorted housing market” that isn’t helping buyers or sellers, said economist Peter Boockvar.
“Bottom line — sales of existing homes are near 12-year lows both because of the lack of inventory, but in turn that is helping to maintain the 40% rise in home prices over the past few years,” Boockvar said in a research note last week. “In the face of a doubling of mortgage rates, that then creates the affordability problem for first-time buyers.”
