Looking for the next leading real estate market? Go to the Midwest

Homebuyers and investors looking for the next top real estate markets should head west – that is, the Midwest.
Seven of the nation's 10 emerging housing markets are smaller cities with strong economies and more affordable homes for sale in the center of the state, according to the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index. The index is a look at the real estate markets that economists believe will be strong in the coming months.
"These markets are a reality for real estate relative to other areas of the country," says Realtor.com Chief Economist Danielle Hale. "Apartment prices are still high, and climbing on a year-by-year basis. Mortgage rates have dropped from record highs but are still high. Budgets are stretched because of inflation. So buyers are looking for affordability, and they find it overwhelmingly in the Midwest, the South and parts of the Northeast."
"These are markets where workers can find work if they are looking," Hale says.
The index identified the top markets for both buyers and investors out of the 300 largest metropolitan areas. He looks at metros with strong housing demand and rising prices combined with strong economies, lots of good-paying jobs, good quality of life and desirable services like lots of small businesses and reasonable commutes. Other factors, such as the median days of homes on the market before selling, property taxes, and the percentage of foreign-born residents were also taken into account. (Targets include the main city and surrounding cities, suburbs, and smaller urban areas.)
Unlike last fall, none of those markets were in the nation's expensive western sector. In fact, the top three emerging markets were all in Indiana.
The metropolitan area of ​​Lafayette, Indiana, about an hour northwest of Indianapolis and two hours southeast of Chicago, earned the top spot on the list. The metro is home to Purdue University and has a robust manufacturing industry with employers such as Subaru, Caterpillar and Wabash National Corp., which makes refrigerated truck trailers, among others.
Affordable housing is another draw. The metro's median home list price of $299,900 in December – about $100,000 less than the national median – makes the area attractive to home buyers as well. The good news for buyers is that the number of homes for sale is up, up 58.7% year over year. And homes spend 20 more days on the market in the metro. However, prices rose by 33.3% in December compared to a year earlier.
About two-thirds of buyers looking for homes in metro Lafayette are from other parts of the country. About half of the online traffic is from Chicago, Indianapolis and New York.
Hale expects demand for homes in the Lafayette area to remain strong due to its manufacturing sector.
"After the [COVID-19] pandemic, there is a focus on rethinking remote global supply chains," following the delays and problems in obtaining goods from overseas, Hale says. "The renewed attention to local producers is going to be a trend we will see over the next few years."

The top 20 developing real estate markets in winter 2023

Lafayette, Indiana, $299,900
Fort Wayne, Indiana, $269,900
Elkhart, Indiana, $247,000
Topeka, Kansas, $224,900
Johnson City, Tenn., $376,018
Columbia, Missouri, $339,900
Kingsport, TN, $299,950
Savannah, GA, $399,900
Columbus, Ohio, $329,450
La Crosse, Wisconsin, $359,900
Manchester, New Hampshire, $495,000
Burlington, North Carolina, $349,000
Portland, Maine, $550,000
Knoxville, Tennessee, $429,000
South Bend, Indiana, $274,900
Sioux City, Iowa, $302,475
Springfield, Illinois, $162,450
Springfield, Missouri, $314,900
Milwaukee, Wisconsin, $375,000
Rapid City, South Dakota, $402,500