With the cost of everything from gas at the pump to a box of cereal surging, Americans are desperately looking for a break. And with rising mortgage interest rates now making it even more expensive to purchase a home, many buyers are looking for real estate deals further off the beaten path.
Many of the up-and-coming housing markets of the summer were smaller cities far from the coasts that boasted more affordable home prices, according to the Wall Street Journal/Realtor.com® Emerging Housing Markets Index. Seven of the top 10 had median list prices that were below the national median of $450,000 in June.
The top emerging housing market was Elkhart, IN, which is no stranger to this list. Prices in the small, Midwestern metropolitan area, about 30 minutes east of the University of Notre Dame and South Bend, IN, and roughly two hours from Chicago, have soared. They rose 17.2%, to a median $279,450 in June, from the same time a year ago, according to the most recent median list prices from Realtor.com.
“With home prices at record highs and interest rates pushing the mortgage payment of a typical house 60% higher than last year, buyers are attracted to markets which offer more for their money,” says George Ratiu, manager of economic research for Realtor.com.
The index identified the top markets for both buyers and investors out of the 300 largest metropolitan areas. The quarterly index looks at metropolitan areas with strong housing demand and rising prices combined with robust economies, lots of well-paying jobs, a good quality of life, and desirable amenities such as lots of small businesses and reasonable commutes to work. (Metros include the main city and surrounding suburbs, smaller towns, and urban areas.)
“In addition, today’s top emerging markets offer the benefits of a strong local economy,” says Ratiu. “The top 10 metros tend to be home to a good mix of private industries, health care, higher education, along with government agencies and institutions. With low unemployment rates, these locales also offer slightly higher wages.”
Elkhart is a recreational vehicle manufacturing powerhouse with an unemployment rate of just 1.8% in May—about half of the national average. Most of the area’s buyers are from nearby South Bend as well as Chicago. About 44% of the area’s buyers are from outside of Indiana, according to Realtor.com.
The area is particularly appealing because it’s so affordable. Those buying a home in the Elkhart metro area are looking at a roughly $1,275 monthly mortgage payment for a median-priced home, according to Realtor.com data. That’s significantly lower than the national median of $2,100 a month.
“Our market this last year has been extremely strong. Inventory’s been low, and demand’s been extremely high,” says local real estate agent Toni Bontrager, of Berkshire Hathaway HomeServices. However, that’s beginning to wind down. Two local RV manufacturing plants are shutting down this fall, and the national economy has become a bit shakier.
“Everything’s slowing down right now,” says Bontrager. “It’s been a seller’s market. I think we’re slowly transitioning into a buyer’s market.”
Homes priced below $200,000 are still going fast—often with multiple offers, says Bontrager. But most homes priced above that are now taking longer to go under contract as bidding wars are no longer as common for them.
Despite the shift in the local real estate market, Elkhart is likely to remain popular with buyers, particularly those looking for deals.
“People make good money here,” says Bontrager. “Homes here that are $400,000 or $500,000 would be over $1 million in California. … We have lakes and rivers, and it’s an absolutely a beautiful place to call home.”
Top 10 emerging real estate markets of summer 2022
- Elkhart, IN, $279,450*
- Burlington, NC, $380,150
- Johnson City, TN, $350,000
- Fort Wayne, IN, $286,400
- Billings, MT, $544,000
- Raleigh, NC, $499,950
- Rapid City, SD, $409,900
- North Port, FL, $598,500
- Topeka, KS, $225,000
- Visalia, CA, $415,995
* Median list prices for the metro area in June from Realtor.com