From USA Today:
A couple of years ago, freshly-minted college graduates Jon and Samantha Reidy crisscrossed North Carolina in search of a place to settle and buy a house.
After hitting seven cities – including bustling millennial enclaves such as Charlotte, Durham and Raleigh – they decided that nearly all of those housing markets had gotten too expensive. So they picked under-the-radar Winston-Salem.
Last year, they bought a house there for $106,000, including repairs, and plan to stay in the area for decades. Jon is even hoping to convince his parents to move down from Agawam, Mass.
“We have no intention of leaving,” says the 24-year-old athletic trainer. Besides its mix of urban amenities and laid-back pace, “Winston was a place we could afford.”
The 50 percent runup in U.S. home prices since 2011 is reshuffling the pecking order of hot housing markets. While many midsize metro areas that had been affordable, up-and-coming alternatives – such as Kansas City, Missouri; Nashville, Tennessee; Raleigh; and Salt Lake City – are still coveted by buyers, their sales are declining or increasing more slowly amid sharply rising prices and shrinking supplies.
Meanwhile, many smaller, more affordable markets – such as Boise, Idaho; Dayton, Ohio; Greenville, South Carolina; and Winston-Salem – are benefiting from an influx of new residents and home sales that continue to climb.
“Even the second-tier markets are getting a little too pricey for a lot of residents,” economist Adam Kamins of Moody’s Analytics says. “Home prices are not rising as rapidly in the (third-tier) markets … and if you can get a good job there you may find a better quality of life.”
By contrast, many smaller cities have a healthier balance of supply and demand, as well as lower prices. In third-tier markets, ranked 51 to 100 by population, prices rose 6.4 percent to $246,000 in the first quarter from a year earlier – below the U.S. median of $264,000 – and sales were up about 1 percent, in line with the national average.
Now, however, some third-tier metro areas are getting pricier as they draw more residents. In Boise, a tech hub that has fast become a hip, more affordable alternative to larger cities such as Seattle and Portland, Oregon, the median house price was up 18.4 percent early this year at $255,000. In Aida County, which includes, Boise, the median was $324,000.
Yet home sales were up 23 percent in 2017 and 2 percent the first half of this year despite historically low supplies, according to Moodys and Boise Regional Realtors.