The hottest real estate market in 2024 will be this snowy city, says Zillow.
Buffalo, New York, may be one of the snowiest cities in the U.S., but it will also be the hottest housing market this year, according to a new report from Zillow.
The real estate company analyzed the top 50 metropolitan areas in the United States and looked at a variety of factors to determine the “hottest” markets.
This includes projected home value growth from December 2023 to November 2024, job availability, the pace of home sales, and other factors.
Buffalo ranked at the top of the list due to its relatively affordable housing prices and the city’s strong job prospects. The typical home value in Buffalo is currently $248,445, compared with the national average of $347,415, according to Zillow estimates. If a buyer puts 5% down on a Buffalo home, he or she will pay $1,792 per month in mortgage costs.
One of the key metrics Zillow used to measure the projected demand for housing in Buffalo was the number of new jobs created in the area compared to the number of new homes being built.
Buffalo had the highest number of jobs per new home of all 50 cities measured by Zillow. As jobs increase, competition for housing will increase, and unless enough new homes are built to meet demand, home prices are expected to rise, Zillow said.
Buffalo are also known for their harsh winters. During the 2022-2023 period, Buffalo received 133.6 inches of snow, according to the National Weather Service.
“Our temperatures are cold, but our market is not,” Vienna Laurendi, president of the Buffalo Niagara Association of Realtors and a real estate agent with Howard Hanna Real Estate Services, told MarketWatch.
Buffalo was also recently designated a federal technology hub, along with Rochester and Syracuse, and is set to receive billions of dollars in federal funding. The funds will be used to establish the region as a semiconductor manufacturing hub next year.
Former New York Democratic Gov. Andrew Cuomo also launched a multibillion-dollar effort called the “Buffalo Billion” to stimulate the economy. The city is also a college town, boasting names like SUNY Buffalo State University and the University of Buffalo. It is also home to the Buffalo AKG Art Museum and several Buffalo Bills players, including Josh Allen and Dion Dawkins.
“We have a lot of energy in both the city of Buffalo and the city of Niagara Falls,” said Laurendi, a Buffalo native.
Laurendi noted that Buffalo has a large medical campus that can attract business not only from the medical community but also from needed support organizations.
“We are the largest small city in America,” she said.
Laurendi also pointed out that there is significant opportunity for more new housing to be built in the city.
“We have a ton of underutilized land,” she told MarketWatch, “and we have old infrastructure and old buildings that need revitalization, and that’s what our developers are looking at today.” Some of that work includes looking at old factories and buildings that are no longer in use, Laurendi added. “But it has quite a fantastic character and can be revitalized into something wonderful.”
Other ‘Hot’ Housing Markets in 2024
Midwestern cities ranked second, third and fourth on Zillow’s list of hottest markets. This is also because there is much more affordable housing in those cities. These include Cincinnati and Columbus, Ohio, and Indianapolis, Indiana.
“Buyers are definitely coming back now that the holidays are over,” Laurendi said. Especially since mortgage rates have fallen below 7%.
Like Buffalo, home prices in Cincinnati and Columbus are below the national average. Both Ohio markets are priced below about $300,000, and a buyer putting down 5% would have a mortgage payment of less than $2,200 a month.
“Cincinnati’s inventory is moving very quickly, and Columbus is expected to see the fastest increase in owner-occupied households, indicating family formation and population growth,” Zillow said.
Affordable markets offer ‘real buying opportunities’ for young people.
Midwestern cities dominated real estate listings last year due to factors including relatively affordable housing prices and a slower pace of living.
“Housing markets are the healthiest when affordable housing prices and strong employment provide young hopefuls with real opportunities to buy and build equity,” said Anushna Prakash, data scientist at Zillow Economic Research.
The hottest housing market last year was Charlotte, North Carolina, according to Zillow. By 2024, the city had fallen to seventh place.
