Buffalo is set to have the hottest housing market in 2024, according to leading real estate marketplace Zillow. Despite its reputation for having severe winters, Buffalo has claimed the top spot in Zillow’s list of the 50 hottest US housing markets for the year.
This recognition is attributed to the town’s affordability, which makes homeownership a real possibility for young individuals.
Anushna Prakash, a data scientist at Zillow Economic Research, says housing markets thrive where reasonably priced homes and robust employment opportunities coincide. These conditions, which exist in Buffalo, provide people with a real chance to own a home.
Other cities joining Buffalo in the top five hottest markets are Cincinnati, Columbus, Indianapolis, and Providence in Rhode Island.
Gap Between Mortgage and Rent Prices Narrowing
Zillow’s estimates show that the average home in the Queen City is valued at $248,445. This is lower than the national average of $347,415.
If a buyer makes a 5% down payment on a typical Buffalo home, the mortgage would amount to $1,792. In comparison, the typical rent is $1,257 per month.
The difference is barely $500, making it feasible for prospects to buy rather than rent.
Inventory and Demand
The influx of new property listings in 2023 showed a significant decline from the previous year. These low-inventory markets are likely to continue experiencing stronger demand in 2024.
Buffalo is among the 50 cities with the highest ratio of jobs to new housing units. This trend is likely to increase pressure on home prices unless new units are built to meet the demand.
Baby boomers and millennials play significant roles in Buffalo’s housing market. Unlike previous generations, baby boomers are not exiting the market in large numbers as they age.
In contrast, millennials are entering their prime home-buying years. This dynamic contributes to the continued robust presence of both generations in the housing market.
Buffalo also boasts several universities, including the University of Buffalo and Buffalo State University. It is also the home of the NFL’s Buffalo Bills. These institutions contribute a great deal to Buffalo’s housing market.
Fed Hub Designation Adds to Buffalo’s Allure
In a positive development, New York Senator Chuck Schumer declared the Buffalo-Rochester-Syracuse region a federal tech hub under the CHIPS & Science Act.
This makes the region eligible to receive billions of dollars in federal funding. The initiative holds the potential to spur economic growth in the area.
Methodology
In the study, Zillow assessed the top 50 metropolitan areas to predict the most vibrant or competitive real estate markets. The evaluation takes into account the projected increase in home values from December 2023 to November 2024.
Factors considered in the study include:
- The expected shift in home value appreciation compared to 2023
- The correlation between new job creation and permitted housing units
- An estimation of the net increase in households owning homes
- The pace at which homes are sold
