The Fastest-Growing Cities Are in Just 2 States. Can You Guess Which Ones?

The Fastest-Growing Cities

Realtor.com

The nation’s fastest-growing cities are more like popular suburbs located just outside of the hottest real estate markets. And they are all clustered in just two states: Texas and Arizona.

During the height of the COVID-19 pandemic, smaller cities just beyond the city limits of Austin, TX, and Phoenix, AZ, grew at the fastest clip in the country from July 2020 through July 2021, according to a recent U.S. Census Bureau report. (The report looked at cities with at least 50,000 residents.)

“Movers are taking advantage [of their newfound ability to work remotely], and we’re seeing more people relocate to the South and West,” says Realtor.com® Chief Economist Danielle Hale. “As a result of the popularity, these areas have seen an influx of people, and in some cases struggled to accommodate them all. Many Sun Belt markets have topped our lists of the areas where home prices and rents are rising the fastest.”

The median home list price in Georgetown, TX, hit $589,500 in April.

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The population of Georgetown, TX, about 30 miles north of Austin, shot up 10.5%. As a result of all of those new residents needing places to live, the median home list price in Georgetown hit $589,500 in April, according to the most recent Realtor.com data. That was up about 33.2% from the previous year.

The city was followed by Leander, TX, which is about 30 minutes northwest of Austin. The population shot up 10%, while home prices rose 31.3% year over year in April, to $599,000.

Queen Creek, AZ

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Queen Creek Town, AZ, about 40 minutes southeast of Phoenix with a $740,000 median price, and Buckeye, AZ, about 40 minutes west of Phoenix with a $485,000 median price, were next on the list. Their populations grew 8.9% and 8.6% respectively.

Rounding out the top five was New Braunfels, TX, between Austin and San Antonio, TX, at 8.3%. The median home list price in the city was $540,000 in April.

The rest of the top 15 were Fort Myers, FL; Casa Grande, AZ; Maricopa, AZ; North Port, FL; Spring Hill, TN, outside of Nashville, TN; Goodyear, AZ; and Port St. Lucie, FL. The last three, Meridian, ID, Caldwell, ID, and Nampa, ID, were all Boise, ID, suburbs.

“Areas like Boise have topped our Wall Street Journal/Realtor.com Emerging Housing Markets Index because it offers great quality of life and real estate value,” says Hale of the index that predicts the next hot real estate markets.

Meanwhile, more than half of the nation’s 15 largest cities lost residents. Many folks who could suddenly work from anywhere with a reliable internet connection relocated to be closer to family and friends or to save money.

Pricey New York City lost the most residents as more than 305,000 New Yorkers left the city. However, it remained the country’s largest city with a population of about 8.5 million.

The rest of the cities where populations fell were Chicago, at -45,000 residents; Los Angeles, at -40,500; San Jose, CA, at -27,000; Philadelphia, at -25,000; Dallas, at -15,000; Houston, at -12,000; Indianapolis, at -5,300; and San Diego, at -3,800.

The post The Fastest-Growing Cities Are in Just 2 States. Can You Guess Which Ones? appeared first on Real Estate News & Insights | realtor.com®.

Sick of Skyrocketing Prices? Escape to These 10 States for the Cheapest Homes

10 States for the Cheapest Homes

Realtor.com

After a punishing few years, many homebuyers are simply calling it quits.

And who could blame them? First, home prices began rising to dizzying heights. Then came the insanely competitive bidding wars, complete with mind-bogglingly high offers over the asking price. Now, surging mortgage interest rates are further eating into the buying power of Americans, leading many priced-out homebuyers to throw in the towel. No más!

But wait. While home prices are up in nearly every corner of the nation, there are still areas that are less expensive than others. Way less expensive, in fact. That’s why the data team at Realtor.com® identified the states with the most affordable homes in the nation based on median home list prices in April.

Homebuyers on more modest budgets—perhaps with the ability to work from anywhere—can still find real estate deals in these states, even if prices have risen over the past few years. While each of them has some economic challenges, they also have some up-and-coming areas, some pockets of wealth, and plenty of natural beauty. And their median home list prices are far below the national price tag of $425,000 in April, according to the most recent Realtor.com data.

“There have been tremendous transformations in many of these states that previously may have been called ‘flyover country,’” says George Ratiu, manager of economic research for Realtor.com. “What flies under the radar for a lot of people is that many of these states have seen economic growth, which has provided more good-paying jobs. [Paired] with a lower cost of living and more affordability, many of these places have attracted new residents.”

Many of the most affordable states are more rural and don’t have as many huge cities, although there are a few exceptions on our list. They don’t tend to have the thriving tech sectors seen in Silicon Valley, Texas, Massachusetts, and many other burgeoning hubs. That’s meant they haven’t tended to attract legions of workers from other states. However, the economic fortunes of many of these states appear to be changing.

“Most of these states have not seen the typical boom-and-bust real estate cycles that coastal markets saw,” says Ratiu.

The most affordable states are predominantly located in the Midwest and South, areas where land and construction labor are often cheaper and there might be fewer building regulations than on the pricier coasts. This makes it easier—and cheaper—to put up more homes. Lower property taxes in many of these states also make homeownership more affordable for buyers.

The states on the list also offer lots of outdoor attractions, which became more popular with homebuyers during the COVID-19 pandemic.

“Most of these states have an abundance of natural attractions,” says Ratiu. “For a lot of young buyers, families with small kids, that will continue to be a draw,”

OK, for months, or even years, now you’ve told yourself and everyone you know that you’re up for a lifestyle change—and finding a truly affordable house is the key to making it all work. So where will it be?

The data team at Realtor.com® identified the states with the most affordable homes in the nation based on median home list prices in April.

Realtor.com

1. West Virginia

Median list price: $199,000

True, West Virginia doesn’t exude the glamour, house the high-profile companies, or receive the kind of effortless media attention of New York and California. And the state has had its share of daunting challenges, including being an epicenter of the opioid crisis. But things have begun turning around during the pandemic as more buyers were drawn to the Mountain State’s lower prices and natural beauty. The Appalachian Mountains run through the state as do numerous lakes, rivers, and hiking trails.

“For an outdoors-oriented person, West Virginia has a lot to offer,” says Ratiu.

Over the past two years, Debra Sullivan, a Realtor®, has seen more buyers from more expensive parts of the country coming into Morgantown, the state’s third-largest city, in the northern central swath of West Virginia. (Median home list prices in Morgantown were $317,700 in April, according to Realtor.com data.) They’re looking for affordability plus outdoorsy amenities as well as proximity to airports and top-notch medical facilities.

“Buyers are looking for areas that have lower prices and lower property taxes, but access to things they enjoy,” says Sullivan, of J.S. Walker Associates.

However, even though prices are lower in many parts of West Virginia, it doesn’t mean it’s easy to get a home right now.

“You’re going to be paying at or above what a property is worth with multiple offers,” Sullivan says. Many buyers are resorting to waiving appraisal contingencies. That means if the home doesn’t appraise to what they offered for it, they will make up the difference. Finding a home under $250,000 “is really, really difficult.”

2. Ohio 

Median list price: $215,000

Ohio was once a manufacturing powerhouse, with thriving cities like Cincinnati, Cleveland, and Dayton. However, like most of the Rust Belt, the state fell on hard times when many manufacturing plants closed or downsized. As residents left and there weren’t as many new folks coming in, home prices fell.

Now the state is hoping to reclaim its manufacturing mantle with Intel building a $20 billion chipmaking factory just outside of the state’s capital of Columbus. The new facilities are expected to create 3,000 Intel jobs and support 7,000 construction jobs—in addition to tens of thousands of positions for suppliers and partners.

“The local sentiment is it will give a very serious boost to the local economy in Central Ohio,” says Itzhak Ben-David, academic director of the Ohio State University Center for Real Estate. The school is located in Columbus.

He attributes the lower prices to more abundant land available for construction and lower, local earnings. There also hasn’t been as much demand for homes from folks from other parts of the country. In April, median list prices in the state fell about 1.5% compared with a year earlier.

“Not many people come from Florida to buy a second home in Ohio,” says Ben-David. “There are no [big] tourist attractions, [seaside] sandy beaches.”

3. Arkansas 

Median list price: $245,000

Don’t sleep on Arkansas, where former President Bill Clinton served as the governor twice. It’s home to the nation’s largest retailer, Walmart, which is headquartered in Bentonville, in the northwestern edge of the state. Tyson Foods, which touts itself as the second-largest chicken, beef, and pork processor and marketer in the world, is headquartered about 30 minutes south in Springdale.

Homes in Bentonville are much pricier, with a median list price of nearly $549,00 in April. But buyers can still find some deals such as this four-bedroom, two-bathroom, single-level brick home for $379,000. Those who don’t need as much space can check out this two-bedroom, 1.5-bathroom house with an above-ground pool for $249,500.

Buyers in Springdale can find more deals as the median home price is much lower, at $375,000 in the week ending May 21. This newly remodeled three-bedroom, 1.5-bathroom house is listed for $265,000.

Fun fact: The Crater of Diamonds State Park, in Murfreesboro, is the only active diamond mine in the country.

4. Kansas 

Median list price: $248,500

There’s no place like home, there’s no place like home—in Kansas—for buyers seeking affordability.

In Kansas City, the state’s largest city, which straddles Missouri as well, the median home price was just $190,000 in April. However, competition for lower-priced real estate is fierce, says Mary Hutchison, a Realtor with Better Homes and Gardens Real Estate in Kansas City. Her office is located in the suburb of Prairie Village.

“There’s still quite a bit of competition for nicely updated, starter homes priced at $350,000 or under,” she says. On the plus side for buyers, “we are seeing a little bit of slowing down for showings of the more expensive homes [and] not as many multiple offers.”

Buyers can pick up this three-bedroom, 1.5-bath home for $170,000 or this three-bedroom, one-bath house for just $110,000.

She attributes the lower prices in Kansas City—well known for its barbecue, jazz, and arts museum—to its status as a smaller-sized urban real estate market.

“Our prices have always been much more affordable than a major metro area,” says Hutchison. “We don’t have national name recognition like a bigger city, but there are quite a bit of things to do here.”

5. Oklahoma 

Median list price: $250,000

During the pandemic, many folks from more expensive, blue states looked for homes in Oklahoma. Some were drawn to the state’s more conservative politics, others by the alluring prospect of just how far their money could go here, says Oklahoma City-based real estate broker Becky Ivins. (And some came for both!)

“You can live like a king in Oklahoma City,” says Ivins, of Movers Real Estate. She’s based in the state’s eponymously named largest city, where the median list price was $270,000 in April. “The cost of living is less. We’re not the coasts, we’re not New York City, we’re not Florida. Those have always been higher.”

This three-bedroom, 1.5-bath, brick house with a two-car garage in Oklahoma City is on the market for just $146,000. Buyers can also choose from this three-bedroom, two-bathroom, single-level house along a walking trail for $199,900.

Even with builders putting up more homes, buyers can expect quite a bit of competition. Before mortgage rates jumped up, Ivins was seeing 15 to 20 offers on homes. Now, it’s slowed down to between five and seven. That’s still quite a bit.

“People can afford less house now,” says Ivins.

6. Mississippi 

Median list price: $258,000

While Mississippi home prices might seem affordable compared with, say, the city of San Francisco—where median prices are more than $1 million higher—they’re still higher than what many locals would like.

“We’re increasing just like the rest of the country,” says Angelia Clark, owner of Re/Max Results in Real Estate in Gulfport, MS. Statewide, list prices rose about 13% year over year in April, according to Realtor.com data. Within Gulfport’s city limits, prices jumped 7.5%, to $249,900 in April. “Demand is up just like everywhere else and, of course, our supply [of homes] is low.”

Those price hikes have been hard for locals in Gulfport, the state’s second-largest city located on the Gulf of Mexico.

“We have casinos and tourism. But we don’t have a lot of high-paying, industry jobs,” says Clark. That means there’s a limit to how much residents can pay for homes, especially with higher mortgage rates. “The other part that keeps prices down is the cost of our home insurance. We are in a hurricane-prone area. … A lot of our areas also require flood insurance.”

The city was devastated by deadly Hurricane Katrina in 2005, then hit again by Hurricane Ida last year.

Clark has seen a lot of out-of-state investors looking for rental homes and vacation-home buyers searching for condos in the area.

This three-bedroom, 1.5-bathroom bungalow in Gulfport, with beach views from the backyard, is on the market for $159,900. Those looking for a condo can check out this two-bedroom, 1.5-bath within walking distance to the beach for $137,500.

7. Michigan 

Median list price: $259,000

Like several of the other Rust Belt states on this list, Michigan was once a manufacturing juggernaut. Detroit, aka the Motor City, was home to Henry Ford‘s first automotive plant, built in 1904. More than 100 cars a day were assembled in that plant during the 1920s, according to Curbed.

The city’s decline began in the 1950s and accelerated into the 1960s. Detroit, and the surrounding areas, lost residents as some auto manufacturing jobs disappeared overseas. Demand for homes dropped along with prices.

Between 2010 and 2020, Michigan had one of the slowest population growth rates in the nation, according to the U.S. Census Bureau. That’s despite more cars and trucks still rolling off Detroit area assembly lines than anywhere else in the nation, according to the Detroit Regional Chamber.

“We don’t get a lot of people moving to Michigan, except corporate transferees,” says Detroit-area real estate agent Tom Nanes, of Community Choice Realty Associates.

That might help to explain why prices in the state fell by 0.36% in April compared with a year earlier. Prices were down 9.8% in Detroit, to $74,900 within the city limits.

8. Indiana

Median list price: $260,000

Indianapolis, the largest city in Indiana, was recently named one of the nation’s most affordable, larger real estate markets by the National Association of Realtors®. List prices in the city jumped 10.6% annually in April, to a median of $259,900.

“The people who have always lived in Indianapolis would not concur that we are so affordable anymore,” says Kristie Smith, managing broker of Indy Homes in Indianapolis. However, she’s seeing the market beginning to slow down as higher mortgage rates are making it more difficult for buyers to offer quite as much.

She saw a lot of clients hailing from Chicago coming into the city, drawn by its lower taxes and greater affordability.

“Our taxes are low, our land prices are low, our home prices are low,” she says, compared with pricier parts of the country.

Buyers can scope out this two-bedroom, 1.5-bathroom, two-story townhouse with a one-car garage on the market for $149,900. It comes with a wood-burning fireplace and patio. Those who prefer a stand-alone home might be interested in this updated four-bedroom, 2.5-bathroom house with a detached garage and a fenced-in backyard for $195,900.

9. Kentucky

Median list price: $260,000

Long known for tobacco and textiles, Kentucky has emerged as a major manufacturing center. One of the nation’s largest airport terminals for cargo is located in the largest city in the state, Louisville, as is Fortune 500 company Humana, a health insurance provider.

Many out-of-state homebuyers have looked in Kentucky in search of larger properties on several acres—or more—of land.

Louisville, home to the famed Kentucky Derby, had a median price tag of $257,900. And while home prices are still rising, they were up only 4.9% in April—a much more modest rise than the 14% hike seen nationally.

Buyers can take a peek at this three-bedroom, 1.5-bathroom ranch with a skylight in the kitchen and a carport for $200,000. This three-bedroom, two-bathroom house features a first-floor primary bedroom with a walk-in closet for $179,900.

10. Missouri

Median list price: $270,000

Here’s an interesting trivia tidbit about Missouri: EminemMaya AngelouMark Twain, and Harry S. Truman were all born in the state. And buyers can still find plenty of real estate deals here as well.

In “Missouri, like many Midwestern states, the price levels are much lower than the East and West coasts because the land is less expensive,” says real estate broker Jim Meyer, of MeyerWorks. “Historically, it hasn’t been as expensive to develop a suburb as in other parts of the country.”

He’s based in the Columbia area, which is the state’s fourth-largest city, where the median home price was $348,000 in April. It’s smack dab in the middle of St. Louis, two hours east, where home prices are significantly lower, at a median $200,000, and Kansas City, two hours west. (Kansas City straddles the Missouri/Kansas state line.)

Buyers in Columbia, which is popular with students attending the University of Missouri as well as retirees, can check out this newly remodeled three-bedroom, 2.5-bathroom house for $225,000. Those looking in St. Louis can score a four-bedroom, two-bathroom Cape Cod for $164,900.

The post Sick of Skyrocketing Prices? Escape to These 10 States for the Cheapest Homes appeared first on Real Estate News & Insights | realtor.com®.

Surf, Sand, and Sublime Digs: This Week’s 10 Most Popular Beach Houses

most popular beach home real estate listings

Realtor.com

Many of us have been active surfers judging by the number of clicks on beach houses this week. This isn’t exactly shocking with the holiday weekend and the unofficial start of summer upon us.

As for the beach houses we all ogled on Realtor.com®, it’s safe to say affordability wasn’t a concern. Many of the most popular beach houses are sprawling oceanfront estates with asking prices in the multimillion-dollar range. It’s easy to see the allure: Although we likely can’t afford to buy ’em, it costs nothing to fantasize about them.

But while many of us click on these properties as a lark, there are buyers who are dead serious about their seaside searches.

“We have seen an increase in our buyer pool of investors purchasing second, third, and even more properties on the beach,” says Vanessa Maggi, director of luxury sales at Maggi Realty in Miami Shores, FL.

“Many Americans are still hesitant to cross borders for vacations, but still have the travel bug,” says Maggi. “They are seeking large, stateside beach homes for family travel. Because of this surge, a beach home is an ideal investment property—and the closer to the beach, the better.”

Amen. So let’s have a look at the 10 waterfront wonders with the most clicks on Realtor.com this week, and try to guess which one will be snapped up first. (Spoiler alert: The only one with a pending offer is the cheapest of them all. Go figure.)

1. 27628 Pacific Coast Hwy, Malibu, CA

Price: $127,500,000
Coastal castle: More of a beach palace than a beach house, this eight-bedroom Mediterranean villa is perched atop a bluff, with views of the Pacific Ocean from almost every room.

The lavish 10,698-square-foot mansion anchors the 3.59-acre property, which also includes a detached guesthouse, a tennis court, staff quarters, and a wellness center with a gym, ballet room, and yoga studio.

There are also multiple terraces and open-air “California rooms” to take in the ocean vistas, and a private pathway leads to more than 208 feet of sandy beach.

Malibu, CA

Realtor.com


2. 8808 First Ave, Stone Harbor, NJ

Price: $13,900,000
East Coast Elegance: Stroll from this brand-new, five-bedroom luxury home, and pass the infinity pool, the 1,300-square-foot marble patio, the cabana with a wet bar, and the beach showers, and you’ll find a beautiful private beach. The dunes and ocean sit at the far end of this deep lot.

On days when it’s too cold to take a dip, residents can enjoy the ocean from numerous balconies. There’s also a rooftop deck with a fireplace, seating, and dining area with a wet bar—all accessible by elevator.

Stone Harbor, NJ

Realtor.com


3. 133 Flyway Dr, Kiawah Island, SC

Price: $20,000,000
Southern comfort: A bridged dune pathway from the ocean will take you to this glorious and significant estate in an exclusive and desirable resort town.

The 10,500-square-foot, copper-roofed, cedar-shingled main residence comes with 2.07 acres, including 200 feet of ocean frontage. The mansion has nine bedrooms—each one tastefully and luxuriously appointed.

The interiors feature an ocean-facing wall of French doors and windows. A grand barrel-vaulted ceiling tops the great room, which is anchored at each end by a fireplace. A remarkable primary suite is housed in its own wing, and there’s a kitchen fit for a Michelin-starred chef.

Outdoors, there’s a pool and pool house, a summer kitchen, and rolling green lawns.

Kiawah Island, SC

Realtor.com


4. 536 Cinnamon Beach Ln, Palm Coast, FL

Price: $3,499,000
Lovely lilac: Known far and wide as “The Sea Gem,” this eight-bedroom oceanfront home is located on North Florida’s Atlantic coast, on the famous Cinnamon Beach. It’s outfitted and permitted for luxury short-term rentals.

The three-story home boasts an open floor plan. There’s an elevator, saltwater pool and spa, plus a bridged walkway to a mostly private beach. It’s being offered fully furnished; everything—including the china—is included in the sale price.

Cinnamon Beach, FL

Realtor.com


5.14 Langsford Rd, Kennebunkport, ME

Price: $2,080,000
Maine attraction: Experience a different kind of beach life in this rustic cottage on the rocky shore in Cape Porpoise Harbor just minutes from the Atlantic Ocean.

The three-bedroom cottage comes with a newly built boathouse, which includes storage space for paddleboards, kayaks, and other personal watercraft. Tranquility is almost guaranteed here, where you can sit by a cozy fire and watch the bald eagles fish or simply listen to the waves lapping the shore.

Kennebunkport, ME

Realtor.com


6. 4203 Ocean Dr, Emerald Isle, NC

Price: $2,650,000
Gold mine: This beautiful beach house has many virtues—among them, $147,585 in rental bookings for 2022. Suffice it to say, income won’t be an issue.

It’s located in the southernmost part of North Carolina’s famous Outer Banks, where families and friends who live on the East Coast love to gather each summer. The butter-yellow beauty is furnished with coastal decor.

Known as Beach Place, this home has six bedrooms, each with its own bath. There’s also a game room with a pool table and a putting green. When you’re ready for the sun, head down the private pathway to enjoy what feels like your own private beach.

Emerald Isle, NC

Realtor.com


7.450 S Beach Rd, Hobe Sound, FL

Price: $90,000,000
Your own private resort: This massive compound stretches across a finger of land just north of Palm Beach. The Indian River is on one side, and sandy beach frontage on the Atlantic Ocean is on the other.

The compound includes four structures: a luxurious main house, two guesthouses, and a beach cabana with entertaining facilities and a direct path to the beach. In total there are 11 bedrooms and 16 bathrooms. The sale price includes all the furnishings.

There’s also a pool and cabana, an outdoor bar, several kitchens, a game room, offices, and staff quarters.

Hobe Sound, FL

Realtor.com


8. 9 Bay Dr, Lahaina, HI

Price: $59,500,000
Maui wowee: Described as a “legacy estate unmatched anywhere in Hawaii,” it comes with 10 oceanfront acres in the middle of the Kapalua Resort.

The 12,000-square-foot main residence features five en suite bedrooms and multiple indoor-outdoor rooms with disappearing walls. To accommodate large groups of guests, there are commercial washers, dryers, freezers, refrigerators, and kitchens.

The lush grounds include tropical fruit trees and flowers. Not only is it a sanctuary for humans, but a portion of it is protected by the Hawaii Island Land Trust as a sanctuary for the nesting and breeding of the ‘ua’u kani (wedge-tailed shearwater) seabird.

Maui, HI

Realtor.com


9.15446 Morrison Ln, Brookings, OR

Price: $1,150,000
Pacific Northwest fixer-upper: The most reasonably priced of the bunch, and also the most humble, this quaint 1960s ranch house on the Oregon coast near the California border already has an offer pending.

In need of a little updating, the three-bedroom, 1,889-square-foot residence sits on two lots that total almost an acre. It has stairs down to the rocky beach and extraordinary ocean views from the deck.

Brookings, OR

Realtor.com


10. 28060 Sea Lane Dr, Malibu, CA

Price: $120,000,000
Haute hacienda: Another Malibu offering, this mansion has serious Spanish style. The 6.62-acre property sits on a bluff overlooking Paradise Cove and has direct access to 339 feet of beach frontage. The views stretch from Palos Verdes to Point Dume.

The 16,836-square-foot main house has tiled walkways and courtyards. Wrought-iron railings and arches can be found indoors and out. There are eight bedrooms and seven fireplaces on the estate, which also includes a guest house. Luxe amenities include a wellness facility, infinity pool, home theater, and game room.

Malibu, CA

Realtor.com

The post Surf, Sand, and Sublime Digs: This Week’s 10 Most Popular Beach Houses appeared first on Real Estate News & Insights | realtor.com®.

8 Fun Facts About HGTV Stars Mika and Brian Kleinschmidt

8 Fun Facts About HGTV Stars Mika and Brian Kleinschmidt

Photo by mikamakesmoves

Mika and Brian Kleinschmidt are on a roll!

Not only did the married HGTV stars of “100 Day Dream Home” recently wrap up the third season of their popular series, but they also helped out on Erin and Ben Napier‘s show “Home Town Kickstart,” where they traveled to Thomaston, GA, to upgrade a couple of storefronts and a basement apartment.

The Kleinschmidts are based in Tampa, FL, and HGTV fans have watched the talented pair create gorgeous custom dream homes in this sunny city in just 100 days or less on their show. Mika is the real estate guru, and Brian brings his developer background to the team.

Mika and Brian’s building approach and fun vibe have garnered a legendary fan base, with nearly 24 million viewers tuning in to their second season. And “100 Day Dream Home” was ranked the No. 1 cable program in its time slot. So, is there anything these two can’t do?

Of course, Mika and Brian are regular folks who wash dishes, take out the trash, and participate in community theater! To help you get a better picture of these HGTV sweethearts, here are a few fun facts.

1. The couple met in high school

They’ve known each other a long time—since their teenage days in high school—but they went their separate ways after graduation. It took a decade of being apart before they finally reconnected and tied the knot in 2015.

2. The couple started in the gym business

Mika and Brian were working in a completely different field before they were discovered and made it to the big time on HGTV. Brian shared in a recent interview that the couple had first owned a gym together. When they sold it for a profit, they moved into the real estate business—and never looked back.

3. Mika and Brian have a cute pup

Mika and Brian have a sweet doggo at their house. Meet Bear, a little Lhasa apso who appears in many an Instagram post and gets a ton of likes just by being his own adorable self.

4. And they have a teenager, too

Mika’s daughter, Jade, is 13, and she’s being raised by her mom and Brian. And judging from this photo gallery, she’s the light of the couple’s lives.

5. Mika and Brian commissioned 10 theme songs

The couple launched a “100 Day Dream Song” campaign.

HGTV

It’s one thing to like music and play it while you’re at work. But it’s quite another to solicit original tunes for the next season of a hit show on HGTV. Mika and Brian did exactly that. They knew they wanted a theme song to accompany their new episodes—though they didn’t stop at just one.

Instead, they broadcast a new music campaign across their social media channels and came up with 10 different theme songs, written and composed to go with each show this season.

6. They’re fast builders

The premise of “100 Day Dream Home” is to complete a fabulous house in this time frame, which, in itself, is rather amazing seeing as most homes take at least six to eight months to build. Plus, with the latest supply chain delays, some folks have to wait more than a year for appliances, tile, and other items to arrive so they can move in.

But if you think 100 days is crazy, we just learned that the couple actually built a house even faster than that. Before the Kleinschmidts were big HGTV stars, they once built a home from start to finish in just 63 days!

7. They’ve never missed a deadline

On their HGTV shows, there’s pressure on Mika and Brian to complete their projects in the allotted time frame—and so far, they’ve finished each home on schedule. Mika credits this success to a ton of preplanning and getting the homeowners they work with to quickly pick out all of the interior finishes that can make a build drag on (like flooring, cabinets, tile, and more).

8. Brian (and his mom!) sing in musicals

As part of the Manatee Players, a performing arts group in Bradenton, FL, Brian and his mom were recently on stage in “Titanic: the Musical.” A review called the show “soaring and powerful,” and Brian’s role as a stoker on the doomed luxury liner was cited in the writeup as “outstanding.”

Singing is a big part of the Kleinschmidt family’s background as Brian’s mom, Ellen Kleinschmidt, is a retired elementary school music teacher.

The post 8 Fun Facts About HGTV Stars Mika and Brian Kleinschmidt appeared first on Real Estate News & Insights | realtor.com®.

Enormous Custom-Built Log Home in Ohio Is This Week’s Most Popular Home

most popular homes

Realtor.com

In addition to barndominiums and private islands, folks love log cabins, we’ve learned. And they really love log cabins that aren’t exactly cabins.

For proof, we turn to the week’s most popular home on Realtor.com®. Sitting on 56 private acres in Ohio, this custom-built log home could hardly be called a cabin.

Tens of thousands of clicks flowed in for this spectacular retreat designed for entertaining family and friends on a grand scale. Built in 2005, the 10,000-square-foot log home boasts three fireplaces, a bar and entertainment room, and a gazebo connected by a walkway to the second-floor deck.

You also clicked on a vaguely Greek-themed home in Maryland with marble tile throughout, an Ohio home built for John Glenn, a Michigan home with a distinctive blue roof, and a Virginia home once owned by the Marines’ most highly decorated officer.

For a full look at the week’s 10 most popular homes, simply scroll on down.

10. 39466 US Hwy 24, Lake George, CO

Price: $100,000
Why it’s here: 
Let the bidding commence! This is a beautifully appointed log-sided cabin on nearly 40 acres of land—and it’s headed to the auction block.

The custom-built two-bedroom home in Central Colorado borders Pike National Forest on three sides. Built in 2018, this cozy cabin features a cathedral ceiling, exposed beams, a wood-burning fireplace, and custom floors.

Lake George, CO

Realtor.com


9. 4012 Maine Ave, Baltimore, MD

Price: $579,900
Why it’s here:
It’s a bit of Santorini in the middle of Maryland. With a blue and white color scheme, this 5,590-square-foot home features luxury marble tile on the first and second floors. There are also four fireplaces plus balconies in many of the eight bedrooms.

Located in the Forest Park neighborhood, the home was built in 1920 and offers an open floor plan. The bright kitchen has waterfall quartz countertops, stainless-steel appliances, and gold hardware. The primary suite sits on the third floor.

Baltimore, MD

Realtor.com


8. 3996 The Old Poste Rd, Columbus, OH

Price: $1,345,000
Why it’s here: 
This home was custom-built in 1974 for former astronaut and U.S. Sen. John Glenn.

The spacious four-bedroom ranch was designed in collaboration with architect Woody Acock. It’s been modernized over the years and now features a great room with a floor-to-ceiling stone fireplace and walls of windows, a chef’s kitchen, and a media room. A new owner can take in views of the Scioto River from the stone back patio or private boat dock.

Columbus, OH

Realtor.com


7. 468 N. Luce Rd, Alma, MI

Price: $1,200,000
Why it’s here:
With nearly 8,000 square feet of living space, this grand midcentury modern home offers luxury golf course living at $154 per square foot.

The well-maintained, six-bedroom residence sits on the 10th fairway of Pine Rivers Country Club. The main level features a family room with a marble fireplace, and the lower level houses an additional family room and a game room.

Alma, MI

Realtor.com


6. 2690 Pine Lake Rd, West Bloomfield Township, MI

Price: $4,199,000
Why it’s here: 
This social media sensation with a blue roof spawned a million Smurf references. It’s easy to see why: The seven-bedroom mansion looks like it was designed to hide from Gargamel in style.

While it lacks the classic Smurf mushroom design, this enchanting 7,476-square-foot home does offer three stories to explore that have been “passionately restored” by the owners. The charming house on a 3-acre lot features a surprisingly classic interior, 175 feet of shoreline along Pine Lake, and a 100-foot-long dock.

West Bloomfield Township, MI

Realtor.com


5. 205 W. State St, Saint Johns, MI

Price: $339,900
Why it’s here: 
This extraordinary 1863 Italianate home known as the John Hicks Mansion is an antique beauty.

Built in the Second Empire style, the seven-bedroom home features ornate window eyebrows and carved walnut doors with glass. The gold gilt cornices are from Germany, the ceiling was painted by an Austrian artist, the banister and staircase are walnut, and wood finishes adorn the living room.

Saint Johns, MI

Realtor.com


4. 43 Main St, Limerick, ME

Price: $450,000
Why it’s here: 
This enormous eight-bedroom home was built in 1793 by Gen. John McDonald.

While the home needs updating, it features landscape murals of Casco Bay by folk artist Rufus Porter. Historic details include nine fireplaces, blown-glass windows, and a compass rose painted on the floor of the grand ballroom. The property is zoned for commercial or residential use.

Limerick, ME

Realtor.com


3. 2700 N Valley View Rd, Ashland, OR

Price: $5,895,000
Why it’s here: 
With nearly 10,000 square feet of living space, this tree-sprouting “House of Roots” surprisingly has just two bedrooms. It’s definitely for a buyer in the market for something different. When we covered the home in 2016, it was available for $8.2 million. The sale includes 708 acres.

This architectural marvel features rounded corners, custom-cut glass, and handcarved branches. The flooring was designed to look like a flowing river and features four kinds of exotic wood. This one-of-a-kind home comes with a pool, an outdoor entertainment space, and an off-grid cabin.

Ashland, OR

Realtor.com


2. 732 Gloucester Rd, Saluda, VA

Price: $415,000
Why it’s here: 
This appealing Virginia home was once owned by the most decorated U.S. Marine. Lt. Gen. Lewis “Chesty” Puller retired to this home in 1955, after nearly four decades of service.

According to the listing, Puller worked on books about his remarkable life while enjoying the beautiful views of the 3.37-acre lot. Built in 1920, the home has been well-maintained over the years and features a primary suite on the first floor with two additional bedrooms upstairs.

Saluda, VA

Realtor.com


1. 10985 Clearport Rd SW, Amanda, OH

Price: $2,950,000
Why it’s here:
If you love log cabins, you’ll simply swoon over this enormous log home. Much grander than your average log cabin, this immense home comes with 56 acres.

The 10,000-square-foot, five-bedroom home features a grand two-story entry and a chef’s kitchen. There is also a sauna, fitness room, in-ground pool, outdoor fireplace on the second-floor deck, and a whole-house generator.

Amanda, OH

Realtor.com

The post Enormous Custom-Built Log Home in Ohio Is This Week’s Most Popular Home appeared first on Real Estate News & Insights | realtor.com®.

Why the Real-Life ‘Conjuring’ House Fetched a Supernaturally High $1.5M Price

Why The Real-Life 'Conjuring House' Fetched A $1.5M Supernaturally High Price

Realtor.com

The infamous house that inspired the 2013 horror film “The Conjuring” was sold for a supernaturally high price on Thursday.

The buyer is Jacqueline Nuñez, a Boston real estate developer, who paid $1.5 million for the rustic Rhode Island farmhouse that is purportedly haunted. Nuñez, who offered well over the $1.2 million list price, plans to continue running the 3,100-square-foot home as a business where paranormal investigators can spend the night and the public can tour the property.

The sellers are paranormal investigators Cory and Jennifer Heinzen, who purchased the home in 2019 for just $439,000. They claimed to have seen unexplained flashes of light and heard voices, footsteps, and knocks inside the house, which was built in 1836.

The Heinzens listed it on Airbnb as an attractive option for visiting paranormal investigators. They told the Wall Street Journal they were selling the property due to Cory’s health issues and the stress of running a business while owning another home in Maine.

Frightening occurrences were reported in the home in the early 1970s, when Carolyn and Roger Perron and their five daughters lived there.

One daughter claimed she watched her mother levitate in a chair and then be thrown in the air during a séance. Clocks would mysteriously stop at 3:07 in the morning, and the family dog, which refused to go inside the house, was found dead in the backyard.

The family invited paranormal investigators Ed and Lorraine Warren to look into the terrifying events, but the Perrons eventually left the home in 1980.

“It’s magical,” daughter Andrea Perron said of the home in an NBC interview. “It’s a portal cleverly disguised as a farmhouse. It’s multiple dimensions, interacting simultaneously.”

The Heinzens listed the three-bedroom, 1.5-bathroom house in Burrillville, about 30 minutes northwest of Providence, in September. But they weren’t looking for just any buyer. They insisted on interviewing potential buyers to ensure the new owners would continue to open the home to paranormal investigators. And they stipulated the new owners not live in the house, for their own protection.

Despite the requirements, the couple “had many offers on the property and very, very competitive offers and interest from all over the world,” says Bethany Eddy of Coldwell Banker Realty in Providence. Eddy was one of the real estate agents who represented Nuñez in the deal.

The sellers “were really looking for the buyer they felt was going to be a great fit to be the stewards of this property,” adds Eddy.

Nuñez says she connected with the Heinzens and the home immediately.

“When I saw the property advertised last September, I was like, ‘Oh my God, I have to have this house,’” Nuñez said on a Facebook livestream on Thursday. “Then when I came to visit, it was just underscored that I have got to be the owner.”

The Heinzens will continue to be involved with the home, helping to host investigations there.

“That makes this whole process a lot easier knowing that we don’t have to walk away and never come back,” Jennifer Heinzen said on the livestream. “We can still be part of this and help watch it grow. That’s the best part.”

Nuñez told the Journal she could see the house becoming a learning center where visitors could connect with spirits. They could be family and friends who have passed away.

The house is “uniquely an amplifier for our energy, attitudes, and beliefs,” Nuñez told the Journal. “If your end goal is to be terrified, it can deliver. Or if you go there to connect with a loved one, it can deliver that, too.”

For Eddy, this has been a “special” transaction. She says she experienced some “interesting feelings” on the property, sensing the purported energy there.

“This is such a unique property with such a special history, and there is a unique energy on the property itself,” says Eddy.

The post Why the Real-Life ‘Conjuring’ House Fetched a Supernaturally High $1.5M Price appeared first on Real Estate News & Insights | realtor.com®.

Did COVID-19 Kill the Dining Room? What’s Next for This Iconic Space

Did COVID-19 Kill The Dining Room? What's Next For This Iconic Space

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About a year into the COVID-19 pandemic, Dan Martin had a revelation: He and his girlfriend had rarely, if ever, eaten at their dining room table.

Instead, they noshed in bed or on the couch in their single-family home in Corrigan, TX, about two hours north of Houston. Their dining room was a big waste of East Texas space. So they, like many people during the pandemic, switched gears and turned their dining room into a home gym—complete with a climbing wall, dead-lift set, elliptical machine, and treadmill.

“Now, [the room] is used twice a day,” says Martin, 44, the author of “Apocalypse: How to Survive a Global Crisis.”

The dedicated dining room was a waning concept even before the pandemic, but COVID-19 might have put the nail in the coffin. These days, the space formerly known as the dining room is often being used as a study, an office, a spare family room—just about anything other than what it was intended to be.

These days, homeowners are turning their spaces into anything useful to them, says Anton Giuroiu, an architect and CEO and founder of Homesthetics, a design and aesthetics site.

“As we spend more and more time indoors, we’re drawn to creating multifunctional spaces in our homes,” Giuroiu says. “I don’t think that absence of a formal dining room will affect [a home’s] resale value. Especially now, with the open floor plan, a dining room can be turned into literally anything you want it to be.”

Dining rooms are transforming into whatever homeowners need

Adapting the dining room to serve a new function grew in popularity during COVID-19.

Getty Images

Even before 2020, fewer people were eating dinner together in the dining room, says Volodymyr Barabakh, co-founder and project director of building contractor Structural Beam in Chicago.

With the pandemic, there was a change in space needs and adapting the dining room to serve a new function grew in popularity.

“The shift was accelerated as people realized they needed to bring activities like work and exercise indoors throughout lockdown,” Barabakh says.

Then came the rising trend of open-plan kitchens and living rooms, and the separate space often offered by a dining room created the perfect private getaway when working out or working from home, he says.

Even before the pandemic, a 2017 survey by Angi (formerly Angie’s List) found that nearly two-thirds of homeowners used their dining room for other activities such as crafts or homework.

Still, 70% of buyers say they’d prefer to have a dining room, according to the National Association of Home Builders. Whether they mind if that dining room looks like an exercise room or a classroom is unclear.

Dining rooms have pivoted as consumers essentially requested more from their homes, explains Deana Vidal, manager of trend consulting for the New Home Trends Institute at John Burns Real Estate Consulting in California.

Entertainment lofts have become study dens, guest rooms are now guest rooms/gyms, and offices are offices/storage areas, Vidal says.

“Consumers need their house to do more to support their lives,” Vidal says. “Areas for study, work, working out, crafts—these are where people see more value than that big dinner party a few times a year.”

Do today’s homebuyers want dining rooms?

Real estate agents and interior designers aren’t surprised to enter homes lacking dining rooms—and many don’t expect to see them return anytime soon.

Dedicated dining rooms simply aren’t in demand anymore, especially in homes that have space to eat in the kitchen, says Leonard Ang, CEO of iProperty Management, an online resource guide for landlords, tenants, and real estate investors,

Plus, he says, in most cases, the homeowner converting the dining room isn’t making permanent changes to the house to accomplish a conversion. So it could always be returned to its original function if there was a need.

Folks are living differently today than they were before the pandemic, so their needs have changed, says Nancy Fire, owner and chief inspirational officer of Design Works International, a New York design studio specializing in original prints and product design programs. That means that the homebuying checklist has also changed.

Some people are craving a space dedicated to dinner parties and social gatherings, while others don’t plan on ever returning to the way things were, Fire says. They’re happy with their dining rooms becoming yoga spaces or offices.

“It really depends on your lifestyle,” she says. “I have friends on both sides of the dining room experience. Some love the extra space while others crave more social interaction with friends and food.”

The post Did COVID-19 Kill the Dining Room? What’s Next for This Iconic Space appeared first on Real Estate News & Insights | realtor.com®.

The Red-Hot U.S. Housing Market Finally ‘Offers Hope’ for Buyers and Sellers, According to This Real-Estate Economist

rise in house prices

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Home prices are up 14% compared to this time last year, and mortgage rates have driven the average monthly payment 50% higher over the same period, so affordability remains a key concern for people looking to move.

Nearly half (49%) of sellers said they plan to sell their home at $500,000 and below, with 15% of them aiming for $200,000 or less, according to a report released Tuesday by real-estate site Realtor.com.

This year’s sellers “are looking to buy their next homes at more approachable price points,” the report noted, with more than half (53%) of sellers aiming to buy a property priced at $500,000 and below, and 17% looking for one costing $200,000 or below.

Roughly 29% of sellers are trading up, and 32% making a lateral price move. (This is the first year Realtor.com asked these specific questions.)

An encouraging sign

There are signs that the housing market is slowing. Sales of new homes fell in April for the fourth month in a row to the lowest level since the pandemic owing to high prices and soaring mortgage rates.

Mortgage rates jumped from just 2.75% in the fall for a 30-year fixed to more than 5.25% in mid-May. Low mortgage rates had made it easier for buyers to purchase a home despite record prices.

“The distribution of sale prices points to an encouraging sign for many buyers who found last year’s housing market highly frustrating due to escalating prices,” the poll of more than 3,000 home buyers and sellers said.

“An increase in the number of affordably-priced homes for sale would be welcome news for markets,” it said, adding that nearly one-third of homeowners plan to sell their homes in the trade-up range of $500,000 to $1,000,000.

George Ratiu, senior economist and manager of economic research at Realtor.com, said the report “offers hope” for seller-buyers, who’ve been helped by the rise in remote work, which shows significant staying power.

“Many move-up buyers are leveraging newfound flexibility to employ creative strategies, such as relocating to an area offering homes that meet their family’s needs without breaking their budgets,” he said.

(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

Doubled-edged sword

However, the shift to remote work is a double-edged sword: Working from home also explains over half of the 23.8% national increase in house prices between 2019 and November 2021, an economic study released last week concluded.

That rise in house prices has pleased those homeowners who have been able and willing to sell, but it has also caused heartache for millions of first-time buyers who yearn to get a foot on the property ladder.

The median sales price jumped to $450,600 last month from $435,000 and hit the highest level on record. The average home price was even higher at a record $570,300, underscoring that the majority of properties for sale are on the more upscale side.

What’s more, nearly three-quarters of homeowners surveyed by Realtor.com who plan to sell their home in 2022 are also buying a home at the same time, Ratiu said, which he said adds “complexity to an already challenging task.”

“While sellers stand to cash out record-high equity upon closing on their home, they are also facing higher prices and interest rates on their next home,” the report said.

The Dow Jones Industrial Index, S&P 500 and Nasdaq Composite were all lower Wednesday in premarket trading as ongoing stagflation fears rattled investors.

The post The Red-Hot U.S. Housing Market Finally ‘Offers Hope’ for Buyers and Sellers, According to This Real-Estate Economist appeared first on Real Estate News & Insights | realtor.com®.

California Dreamin’ No More: The State’s Housing Hot Streak Is Over—See the New Paradise Taking Its Place

California Housing Hot Streak Is Over

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California has long reigned supreme as a highly desirable place to live, blessed with gorgeous weather, a bustling job market, beaches, and natural beauty that make it a veritable paradise. Year after year, it owned most of the nation’s hottest housing markets. But now, it seems that America’s torrid, long-term West Coast real estate love affair might finally be ending.

That’s what the Realtor.com® 20 Hottest Markets rankings show for April, which factor in a combination of demand (measured by the number of unique views per home listing) and how quickly homes are selling (measured by the number of days on the market). For the first time in the history of these monthly rankings—which began in 2016—California has dropped off the list and is nowhere to be found.

It’s hard to imagine that a mere four months earlier, in January, California was still sitting pretty with five metros in the top 20 hottest markets. (Metros include the central city and the surrounding suburbs, towns, and smaller urban areas.) Fast-forward to March, and that number had dwindled to just two metros; by April, California fell out of the rankings entirely.

How did the Golden State lose so much of its shine so fast?

Why California is no longer the hot place to live

While California dreamers have put up with exorbitantly high home prices for years, it appears that at least some homebuyers have reached a breaking point. Caught between the hard realities of rising mortgage rates (now over 5%) and inflation nibbling away at their paychecks, many are searching for a new kind of paradise—namely, a place where they don’t have to fret over paying the bills.

“The past two years of the [COVID-19] pandemic have seen a pickup in the number of people moving away from the Golden State, driven by high real estate prices and increased cost of living,” says George Ratiu, manager of economic research for Realtor.com. “Families are paying more for food, gasoline, clothing, day care, and other services, while their paychecks are not keeping up with the rate of inflation. In addition, housing costs have been jumping by double-digit rates over the past year, further squeezing budgets.”

While picking up and moving to a new state is never easy, the rise of remote work has given many the extra wiggle room they need to make the leap.

“These spiraling costs are leading to difficult choices,” Ratiu says. “For many people, the alternative to these pressures has been to seek housing by moving to less expensive cities, with more affordable housing options.”

Why West Coasters are heading east

So if California is no longer a hot place to live, what is? It turns out, homebuyers are heading east, where more affordable homes lie in wait.

The New England city of Manchester, NH, ranked as the No. 1 hottest market in April (and for the 10th time this past year), followed by nearby Concord, NH, at No. 2 and Burlington, NC, in third place.

“We’ve seen an influx of out-of-state buyers since the pandemic who now work from home full time and find their dollar goes a lot further in New Hampshire than it does in their current state, plus the added bonus of no state income tax or sales tax,” says broker Adam Gaudet, president of the New Hampshire Association of Realtors.

While low home prices dominated April’s hottest markets, keep in mind we’re talking about relative affordability for a particular area. In Manchester, for instance, home prices average $449,900, or $24,000 above the national median of $425,000. Still, Manchester prices are much lower than the median price of $759,000 in Boston, located two hours away.

Overall, America’s 20 hottest markets in April are a surprisingly affordable lot, with an average list price of $376,000—12% lower than the national median and 24% lower than the average in March.

Rochester, NY, claimed the most affordable metro title on April’s list with a median home price of just $200,000.

How fast are real estate deals closing today?

Yet homebuyers hoping to score an affordable home in one of these hottest markets will need to move fast.

Indeed, listings in these top 20 rankings spent an average of just 16 days on the market—less than half the usual 34 days nationwide. In Manchester, homes sat for a mere eight days before getting snapped up.

“Open houses remain busy, and listings that are accurately priced are receiving multiple offers,” says Gaudet about the Manchester market. “Since the interest rate increase, the amount of offers a property receives has decreased. At one point we would see 12 to 20 offers on a property; now it’s closer to four to eight.”

Even so, odds are, this pace is not slowing down anytime soon.

“We are transitioning toward a post-pandemic reality, which may lead to changes in what buyers are seeking,” adds Ratiu. “However, affordability will remain a primary focus for buyers in the months ahead.”

April’s hottest real estate markets

Hottest Metros Hotness Rank Median Days on Market Median Listing Price
Manchester, NH 1 8 $449,900
Concord, NH 2 14 $439,000
Burlington, NC 3 13 $360,000
Portland, ME 4 15 $525,000
Elkhart, IN 5 11 $249,900
La Crosse, WI 6 16 $340,000
Burlington, VT 7 17 $433,000
Worcester, MA 8 14 $449,000
Rochester, NY 9 10 $199,999
Springfield, MA 10 17 $355,000
Columbus, OH 11 13 $325,000
Kingsport, TN 12 24 $289,000
Billings, MT 13 22 $523,000
Raleigh, NC 14 9 $475,000
Hartford, CN 15 20 $349,999
Johnson City, TN 16 25 $364,900
Greenville, NC 17 24 $278,000
Columbia, MO 18 15 $349,000
Fort Wayne, IN 19 24 $270,000
Durham, NC 20 16 $495,000

 

The post California Dreamin’ No More: The State’s Housing Hot Streak Is Over—See the New Paradise Taking Its Place appeared first on Real Estate News & Insights | realtor.com®.

The Housing Market Is Showing Signs of a Correction: What This Means for Buyers and Sellers

The Housing Market Is Showing Signs of A Correction

Realtor.com / Getty Images

Cracks are beginning to appear in the red-hot housing market.

Spiraling mortgage rates on top of record-high and still-rising home prices are leading many experts to predict the real estate market is on the verge of a correction—if it isn’t already in one. They anticipate home prices will flatten, or even go down a bit, in certain markets.

Home sales have already been dropping; fewer buyers are seeking mortgages because they can’t afford the double whammy of high prices and rates on top of soaring inflation. Real estate agents are reporting smaller bidding wars and sellers cutting prices. Prices have even begun falling in a few parts of the country.

“A housing correction has begun,” says Mark Zandi, chief economist at Moody’s Analytics. “There are a growing number of cracks in the housing market, and they’re going to turn into fissures and fault lines in the coming months.”

Median home list prices in America hit a new high of $425,000 in April—up 14.2% in just one year, according to the most recent Realtor.com® data. Meanwhile, average mortgage interest rates climbed to 5.25% in the week ending May 19. That’s a 75% increase in a year’s time.

The result is that new buyers would be paying about 50% more for the same home compared with a year ago in their monthly mortgage bills. And that’s greatly diminishing the buying power of many Americans—especially during a time when inflation has hit a 40-year high, gas prices have spiked, and even rent levels are nationally hitting new highs.

However, experts don’t believe the market is in a bubble or a crash is in the cards, like during the Great Recession. The nation is still suffering from a housing shortage that has reached crisis proportions at a time when many millennials are reaching the age when they start to consider homeownership. That’s likely to keep prices high.

In addition, lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure. And prices aren’t expected to plummet unless another wave of foreclosures and short sales sweeps through the nation.

“Housing goes in big cycles. You see booms and busts frequently in real estate,” says Bill McBride, author of the economics blog Calculated Risk. He predicted the last housing bust. “Right now is a boom. But we will see a time when there’s open houses and there are only looky-loos and crickets.”

Home sales are falling

For now, homebuyers, especially first-timers, are feeling the pain. In the past two years, prices have risen 32.4%. With higher prices come higher down payments. Saving up that ever-increasing sum is no easy feat when the cost of just about everything has jumped and there have been steep drops in the stock and cryptocurrency markets.

Many have been forced to postpone their homebuying plans. Mortgage applications from buyers hoping to purchase a home dropped 15.2% year over year in the week ending May 13, according to the most recent survey from the Mortgage Bankers Association.

“There’s no way that enormous jump in housing costs isn’t going to affect buyer demand,” says Patrick Carlisle, chief market analyst in the San Francisco Bay Area for the real estate brokerage Compass. “It’s also coupled with the highest prices in history. That can’t not have an impact.”

Sales dipped 2.4% for existing homes in April and nearly 13% for newly built residences in March, according to the most recent National Association of Realtors® and U.S. Census Bureau and the U.S. Department of Housing and Urban Development data. (New-home data is for sales and properties for sale.)

“As the year progresses, we’ll see home sales slow further,” says Realtor.com Chief Economist Danielle Hale. “Buyers are going to be more discerning. People are likely to think twice before stretching to the edge of their budgets with the prices of everything going up.”

How much could home prices fall?

Home prices have yet to catch up with the hard realities of today’s housing market. Median list prices were 15.9% higher year over year in the week ending May 14, according to the most recent Realtor.com data.

The disconnect is likely because many buyers locked in their mortgage rates before they shot up so much. Buyers might not realize they no longer qualify for as much money as they did when rates were lower or how much higher their monthly payments will be. And sellers are still seeing record sale prices and are reluctant to accept anything less. The result is the market will take a little time to adjust.

However, price cuts on listed homes were up 12% compared with last year, according to April data from Realtor.com. Experts predict fewer bidding wars and less outrageous offers over asking prices, which could also keep prices in check.

“Even the hottest market eventually cools,” says Compass’ Carlisle. “That’s the law of nature.”

Most real estate experts predict prices will flatten, rather than drop nationally. There are still too many would-be buyers than there are homes for sale.

“The fundamentals driving house price growth in the U.S. remain intact,” says Odeta Kushi, deputy chief economist at real estate financial services company First American. “The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”

Another influx of cheap homes going up for sale, which would bring down prices across the nation, isn’t likely either.

“What really drove down prices were all of the foreclosures and short sales,” says McBride of Calculated Risk. Today, “the vast majority of people don’t need to sell. Without short sales and foreclosures, you don’t have the downward pressure on prices.”

Which housing markets are most vulnerable to falling prices?

Not every housing market is likely to emerge from a correction unscathed. Vacation areas, the Rust Belt and other parts of the country with weaker economies, and the lower end of the market could be hurt most by the changes underfoot. Cities with extremely high prices and high crime could also be affected.

“Second-home markets get hit hardest, fastest in a shift to a cooler market,” says Carlisle. Even though these are typically wealthier buyers, many have been affected by the downturns in the financial and crypto markets. “Nobody has to buy a second home.”

Lower-priced homes and communities where prices are more affordable could also be deeply affected. While it sounds a bit counterintuitive, buyers in these price ranges typically need mortgages. And they’re likely to have a harder time amassing down payments and qualifying for large-enough loans with these higher mortgage rates.

“One wild card in all of this is investors,” says Zandi. “They have a lot of cash to deploy, so they could keep the market going more strongly.”

The work-from-anywhere phenomenon is likely to play a part in which real estate markets continue to see price spikes—and which falter. If professionals can continue working remotely, some will likely leave the nation’s most expensive cities. Crime could also be a deterrent.

“The areas where it is super expensive and people are moving out will naturally be vulnerable to some price corrections,” says Lawrence Yun, chief economist of the National Association of Realtors. He believes the San Francisco Bay Area and New York City could be vulnerable.

The Bay Area is already seeing the start of what could become a correction.

“The market is definitely shifting and becoming cooler, and that’s becoming clearer day by day,” says Carlisle. “There are fewer buyers at open houses, there are fewer offers on new listings, and sometimes no offers. Price reductions are just beginning to creep up.”

Smaller cities where there aren’t enough high-paying jobs for locals to support these sky-high prices could also be on shaky ground. Already, prices are falling in some of these areas, predominantly in the Rust Belt.

The hottest parts of the country, which saw the steepest run-ups in prices, could also be in for a big shift. If fewer buyers from other parts of the country are moving in and there aren’t enough local buyers, prices could moderate.

However, Yun doesn’t believe there is any reason for folks to panic.

“If there is a correction, it will be a brief duration,” says Yun. “We may see some price reductions for one year before popping up again.”

More homes are going up for sale

Amid all of the uncertainty, a bright spot for buyers is the number of homes for sale is beginning to rise. Instead of inventory continuing to fall, about 5% more homes were on the market in the week ending May 14 compared with a year ago, according to Realtor.com data. Active listings ticked up 0.2% in the prior week.

That might not sound like much, but it was the first time there has been an increase in housing inventory since the end of June 2019 before anyone had ever heard of COVID-19. Prices surged by so much in response to the lack of properties for sale.

“The housing market is at a turning point,” says Hale of Realtor.com. “We’re starting to see signs of a new direction, but the ball is still in sellers’ courts in most housing markets.”

The post The Housing Market Is Showing Signs of a Correction: What This Means for Buyers and Sellers appeared first on Real Estate News & Insights | realtor.com®.