3 real estate markets that will increase in value by the end of 2024

The real estate market remains difficult for many Americans, both buyers and sellers. Rising inflation, low inventory levels and ever-increasing real estate prices make the dream of owning a home difficult to achieve.

As for real estate prices, they have continued to rise across the country in recent months – a trend that shows no signs of slowing down.

The median home price rose to $419,300 in May, a 5.8 percent jump over the past year and “the highest price ever recorded and the 11th consecutive month of year-over-year price increases,” according to the National Association of Realtors (NAR) Existing Home Sales Report, released June 21.

According to Freddie Mac, mortgage rates are hovering around 7%, with the average 30-year mortgage term decreasing slightly to 6.87% on June 20.

The combination of high home prices and elevated mortgage rates has proven to be a challenge for the housing market and has slowed sales activity, said Danielle Hale, chief economist at Realtor.com, in a commentary on the NAR report. As the Fed scales back the number of rate cuts it will make this year, Haled noted that “it may be too little, too late for some prospective first-time homebuyers who likely decided to take advantage of the rent reductions, a factor behind the declining homeownership rates for younger households.”

Which real estate markets are experiencing an upturn against this background?

“By the end of 2024 and for the next several years, affordability will be a ‘hot market,'” said Dottie Herman, vice chair and former CEO of Douglas Elliman Real Estate. “It’s the primary reason individuals and families are moving. Affordability equals demand, and small to mid-sized cities and markets are attracting millennials, the largest group of Americans buying homes.”

Herman added that cities and surrounding communities in the South and Southwest are experiencing a large influx of residents from other states where life has become too expensive.

“Even cities in the Midwest, in the Rust Belt, that have been almost forgotten because of the loss of manufacturing jobs, have seen housing prices rise,” she said. “When jobs come back, workers move there and so does the local economy. Then prices go up.”

Realtor.com’s Hale agreed with the premise that real estate markets that offer affordable prices to homebuyers will continue to see rising prices in 2024.

They believe prices are on the rise in three major cities, based on Realtor.com’s May hottest markets report and data.

1. Raleigh-Cary, North Carolina

The market rose 89 places in the rankings to No. 127 as supply tightened and page views exceeded the U.S. average, Hale said.

“Raleigh is the most expensive of these markets, with a median list price of $462,000,” she said, adding that the price per square foot has increased 4.4 percent.

In turn, Hale noted that buyers in Raleigh-Cary will see an increase in homes for sale (+14.6%) and an increase in the total number of homes for sale (+28%), but homes will continue to sell quickly.

“Market time was only 32 days in May, 12 days less than a year ago and 13 days less than the U.S. overall,” she added.

Other experts echoed that sentiment, including Kevin Leibowitz, president and CEO of Grayton Mortgage, who said North Carolina appears to have “the most momentum.”

“We do quite a bit in the Raleigh area, and that market has been strong since we entered in 2018,” he said. “The price is — generally — lower than in our more expensive markets — like California and New York — and that makes it more interesting to a larger number of buyers.”

2. Philadelphia, Pennsylvania

This market rose 86 places in the rankings to 101 out of 300. The main reasons for this were limited supply and demand above the US average.

Additionally, Hale said the median home price in Philadelphia is affordable, especially for a large coastal market, and at $382,000, it is the most affordable of these markets.

“This has helped keep the Philadelphia market attractive, and the median asking price has increased 9.3% year over year, while the typical price per square foot has similarly increased 8.3%,” she said.

In turn, Philadelphia buyers will see more homes just listed (+8.5%) and an increase in the total number of homes for sale (+8.4%). However, homes will continue to sell quickly, she added.

3. Chicago, Illinois/ Naperville, Indiana/ Elgin, Wisconsin

This market rose 67 places in the rankings to 63rd out of 300, making it the highest-ranking of the three, Hale said.

“An affordable median home price of $400,000 helps the Chicago area stand out,” she said. The median asking price increased 6.3% year over year, while the typical price per square foot increased similarly, by 6.9%.”

For buyers in Chicago, while there aren’t as many newly listed homes compared to last year (-3.9%), the total number of homes for sale is still up slightly (+4%), even though homes continue to sell quickly, she said.

“Of these three markets, Chicago was the fastest growing market, with market time in May being just 25 days, nine days less than a year ago and 19 days faster than the U.S. overall,” Hale added.

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