Buffalo is best in 2024, but the Buckeye State dominates
Zillow predicts some of the hottest markets for price growth and home sales will be those in the Great Lakes region, with three Ohio cities in the top 10.
Key points:
- Five of the top 10 markets for 2024 were in states bordering the Great Lakes.
- Several of the cities offer more affordable prices but have still seen above-average appreciation in the past year.
- On the other end of the spectrum, Zillow expect New Orleans to be the coolest market, with home values declining 6% in 2024.
Where will buyers and sellers fare the best in 2024?
Zillow has unveiled its top picks for the cities that are expected to outperform in terms of price appreciation, inventory and time on the market in 2024. And the areas Zillow has landed on are largely in regions that have seen an uptick in home sales in recent months.
The cities that made the cut
The Great Lakes region dominated Zillow's list of hottest markets, led by Buffalo, New York — one of two Northeastern towns to make the top 10. Ohio claimed the most entries, with cities in the second, third and eighth spots.
While fewer Southern cities were represented this year, the Southeast still made a strong showing, with last year's top pick — Charlotte, North Carolina — dropping into seventh place.
To come up with the rankings, Zillow looked at home value forecasts, housing market activity, local labor markets, new home construction and total homeowner households in each city.
After Buffalo, the Ohio metros of Cincinnati and Columbus took the No. 2 and 3 spots, Indianapolis came in fourth, and Providence rounded out the top five. The remaining cities on the list were Atlanta, Charlotte, Cleveland, Orlando and Tampa.
What makes Buffalo so hot?
"Vaulting Buffalo to the top of the list are recent increases in the number of jobs created compared to the number of new homes construction projects being approved, as well as expectations for steady home values," Zillow researchers said.
According to Zillow's home value index, the typical home in Buffalo is worth $213,000 — well below the national median — but appreciation has been strong, with values increasing 5.8% in the past year vs. 2.2% nationally, based on Zillow data. Going back five years, the typical home value in Buffalo has nearly doubled.
Ohio comes on strong
Three Ohio cities made the hot list: Cleveland, which dropped to eighth place from No. 2 last year, and Cincinnati and Columbus, which made strong debuts in second and third place.
Cleveland was one of eight cities to post an all-time high in terms of home price growth in the most recent Case-Shiller report. And similar to Buffalo, all three Ohio cities are more affordable than the average U.S. metro and have seen notable appreciation.
"Cincinnati's second-place rank can be chalked up to its high market velocity — for most months of 2023, homes that went pending in Cincinnati did so in a median of just five or six days," Zillow researchers noted.
What cities are feeling the chill?
Sometimes it's not cool to be cool, and that's a sentiment likely felt in New Orleans, San Antonio, Denver, Houston and Minneapolis. Zillow predicts those cities will see the lowest price growth and slower home sales this year.
"Each of these is characterized by expected annual home value declines, led by New Orleans where Zillow expects the typical home value to fall by 6% in 2024, and by a projected decline in the number of owner-occupied households," the report said.