10 Smaller Housing Markets That Are Now Red-Hot

Home shoppers weary from years of rising prices appear ready to ditch big-city life and move to smaller metros in an attempt to find bargains.

A lot of people share this strategy, and it is pushing up prices even in these smaller housing markets around the country.

Those are the findings of the latest Wall Street Journal/Realtor.com Emerging Housing Markets Index. According to Realtor.com, the index zeroes in on the 300 largest metropolitan areas and tries to identify which markets are poised to do well in coming months.

The rankings are based on factors such as:

• A robust local economy
• Low unemployment
• High wages
• Amenities such as short commutes to commercial areas
• Median days homes spend on the market
• Property taxes

Why are smaller metros drawing so many new residents? In a press release, George Ratiu, manager of economic research for Realtor.com, says:

“The past couple of years elevated the profile of midsized cities across the country as Americans faced with social distancing and remote work sought a more balanced lifestyle during the pandemic, with a particular focus on outdoor pursuits. In addition, homebuyers grappling with rising prices in large metros found safe havens in the relative affordability of smaller markets.”

After examining the country’s 300 largest metropolitan areas, these are the top emerging housing markets in America.

10. Raleigh, North Carolina

Median home price: $448,625

When everybody wants to move to your town, things can get a little crazy, as we reported previously in “15 Cities Where Homebuyers Are Most Likely to Face Bidding Wars.”

Fortunately for homebuyers, the Raleigh metro also made the list of the “15 Cities Where Homebuyers Get the Best Interest Rates.”

9. Billings, Montana

Median home price: $482,500

As soon as the pandemic provided an excuse for people to work remotely, they began flooding into Montana.

A Montana State University Billings study found that people move to Big Sky Country because it is safe and secure.

8. Fort Collins, Colorado

Median home price: $634,995

Fit folks might want to move to Fort Collins before the market grows too expensive. The town has 113 fitness establishments per 10,000 total establishments, and a high percentage of residents — 5.2% — walk or bike to work.

Those facts were enough to earn Fort Collins a place on the list of “The 10 Most Fitness-Friendly Cities for 2021.”

7. Coeur d’Alene, Idaho

Median home price: $1,007,891

Love being by the water but can’t stand those oceanfront prices? Move to Coeur d’Alene and revel in life on Lake Coeur d’Alene.

The 30,000-acre glacier-formed lake got a boost from the 1906 creation of the Post Falls Dam, as we note in “The Best Vacation Lake in Every State.”

Idaho itself is attracting more new residents than any other U.S. state, in part because of its relatively low taxes.

6. Boulder, Colorado

Median home price: $797,500

If you are a technology geek, Boulder is the place for you. It recently earned honors as the best midsized market for tech workers.

Given the expensive home prices, you better land a high-paying job — tech or otherwise — if you end up here.

5. Naples, Florida

Median home price: $825,000

Naples ain’t cheap, especially by Florida standards. But it long has attracted well-heeled retirees to its balmy shores.

In fact, U.S. News & World Report recently named it the second-best city for retirement in America, which was enough to earn it a place on our list of “10 Great Warm and Sunny Places to Retire in the U.S.”

4. Santa Rosa, California

Median home price: $987,500

Yes, Santa Rosa is an expensive place to buy a home. But it’s tough to put a price on happiness, and Santa Rosa is one of “The 15 Happiest Cities in America.”

The former home of Peanuts creator Charles Schulz earns high marks for the emotional and physical well-being of its residents.

3. North Port, Florida

Median home price: $575,000

Located on Florida’s Gulf Coast, North Port’s housing market is as hot as the state’s legendary sunshine.

In fact, real estate might be a little too hot in the town. North Port is among six Florida cities to make the list of “The 10 Most Overpriced Housing Markets in the U.S.”

2. Santa Cruz, California

Median home price: $1,262,500

The fact that the Santa Cruz market is so hot despite being so expensive underscores “the importance of quality of life for some deep-pocketed homebuyers,” Realtor.com says.

This city — which is about 90 minutes south of San Francisco — earned a reputation during the COVID-19 pandemic as a place offering outdoor opportunities at a time when spending time in the fresh air was the safest place to be.

1. Rapid City, South Dakota

Median home price: $436,988

If you are looking for a town with a relatively small population (144,514), low unemployment (2.4%) and no state income taxes, Rapid City is tough to top.

Realtor.com says residents of three cities — Washington, D.C., Denver and Omaha, Nebraska — recently have been responsible for 1 in 5 views of housing stock in Rapid City.