Small Markets See Exponential Home Price Growth

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Home buyers are seeking affordability, in turn driving new cities to the top ranks of the hottest housing markets in the second quarter of this year. The result: Smaller, more affordable markets dominated the rankings in The Wall Street Journal/® Emerging Housing Markets Index, which identified the top markets for both buyers and investors in the second quarter of this year.

The index evaluates the nation’s 300 largest metro areas, looking at strong housing demand, home prices, the local economy and jobs market, real estate taxes, and desirable amenities.

Six of the top 10 markets had list prices under the national median of $385,000 in June, according to®. Billings, Mont., topped the rankings. Median home list prices there are up nearly 31% in June compared to a year earlier.

“These are places where the housing market is poised to do well, where home prices are expected to grow,” said Danielle Hale,®’s chief economist. “They have very strong housing demand and a relatively low number of homes for sale. It’s already causing price increases, and we expect it to keep pushing prices higher.”

The top emerging real estate markets in the second quarter of this year, according to the index, are:

Billings, Mont.: $464,450

Coeur d’Alene, Idaho: $831,950

Fort Wayne, Ind.: $238,750

Rapid City, S.D.: $365,500

Raleigh, N.C.: $411,095

Portland, Maine: $472,900

Waco, Texas: $290,000

Johnson City, Tenn.: $299,450

Bangor, Maine: $243,250

Huntsville, Ala.: $317,450