Active inventory has been increasing since 2022. In fact, according to Realtor.com, November 2024 saw the highest amount of residential inventory on the market since January 2020 (before the pandemic lockdowns).
Usually, sellers are also buyers (unless they plan on renting). So this could be an indicator that the overall market is starting to overcome “sticker shock” from relatively high mortgage rates, and are more open to buying than they were at the beginning of 2023 or 2024.
But which individual markets are seeing the strongest demand? To answer this, I analyzed current and historical data from Realtor.com. Here’s what I found.
Biggest Days-on-Market Decline
First, let’s look at the markets with the highest DOM.
The highest concentration of low-DOM markets appears to be in the Northeast, with Lancaster, Pennsylvania (33 days), Canton-Massilon, Ohio (35 days), and Oshkosh-Neenah, Wisconsin (36 days) in the lead.
Their number of active listings fall around the bottom 25% of all markets, so it’s likely that demand for homes is high relative to their low supply.
But what if we instead measure the markets that had the largest decline in days on market rather than just DOM by itself?
Oshkosh-Neenah appears to have the largest year-over-year percent decline in DOM (-14%). The tiny metro sits just below Appleton, Wisconsin, and to the west of Lake Winnebago.
Runners-up for the largest DOM decline include:
Besides DOM, is there another way to measure market demand? Big MLS listing sites say there is.
The Hottest Housing Markets (Currently)
Listing sites like Realtor.com measure market demand by how many unique people view each property in a given market.
Realtor.com has gone one step further and calculated a “hotness score,” which takes their measured demand and days on market into account. The higher the apparent demand (based on how many people are viewing properties in a market on its website) and the lower the DOM, the higher the “hotness score” is (with a ranking of 1 being the hottest market).
Here’s a straightforward list of the top 10 hottest markets:
The Northeast appears to have a higher concentration of these “hot” markets. But what about the markets that became hotter this year than they were last year?
Here are the top 10 markets that had the most change from cool to hot:
This makes sense, as these markets are mostly in line with what we saw when we measured the yearly decline in DOM.
The conclusion? The Northeast (and Midwest) are pretty “hot” right now, which is good for sellers, and the South appears to be cold, which may be good for buyers.
Let’s dig a little more into the “colder” markets, where deals may be more common right now.
Where the Coldest (Buyer’s) Markets Are
Because finding the “coolest” markets is simply the opposite of the “hottest,” these maps already show which markets are the coolest (most markets in the South).
To make it easy: Bend, Oregon had the highest DOM (114 days), with the runners-up being:
But just because a market is “cool” doesn’t mean it automatically has good underlying fundamentals. So next, I’ll be looking only at the “cooler” (buyer’s) markets that also have solid job, household, and income growth.
Cold Markets, Hot Fundamentals
After merging data from the U.S. Census and the Bureau of Labor Statistics (BLS), then filtering for only the markets with the highest five-year job growth, income growth, and household growth, then removing all markets with relatively high supply already permitted, and then filtering for only the “coldest” markets according to DOM and relative page views on Realtor.com, we arrive at this list of buyer’s markets with the best underlying fundamentals:
While you may be able to find deals in these buyer’s markets, I wanted to see if there were any more affordable buyer’s markets. So, I loosened up the filtering on job, income, and household growth while also removing all markets with higher-than-national median prices. Here were the results:
Readers of my previous articles know I’m not the biggest fan of Texas markets for rookie investors due to the constraint that high property taxes place on your cash flow. That being said, there are many people making the numbers work and will continue to benefit from Texas’ growth for years to come.
Out of this list, I personally like Bowling Green, Kentucky’s location the best (it’s also a 1.5-hour drive from downtown Nashville for residents itching for a city day trip). But investors who’d like to invest in a proper city should also pay attention to Oklahoma City, Oklahoma.
Final Thoughts
I hope this helped. For any investors looking for deals right now, I’d recommend looking into cooler markets with high DOMs (buyer’s markets). There are plenty of them in the South and in a few primary markets with solid fundamentals.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
