The housing market is in Empire State mode of mind this year, with another snowy town in upstate New York taking the top spot in our Best Housing Markets of 2024 ranking.
To rank the best areas for first-time buyers, Realtor.com analyzed markets based on several factors, including inventory, home prices, expected home price appreciation, “culture and vibrancy” and commute times.
Irondequoit was bumped to the top of the list, along with the affordability of its housing stock, and the expected growth in the value of those homes. The median listing price as of November was $187,000, well below the national average of $382,230.
If a buyer made a 5% down payment for a typical Irondequoit home, their monthly mortgage payment would be less than $1,200 per month.
But good luck finding a home to buy. Inventory in Irondequoit was so low in December, with homes on the market after 27 days, versus the national average of 61 days, according to Realtor.com data.
There were 11.5% fewer homes for sale there in December than a year earlier, according to data from Realtor.com, which looked in ZIP codes 14609, 14621, 14622 and 14617.
“We don't have anything,” Michael O'Connor, president of the Greater Rochester Association of Realtors, told MarketWatch. “We're at a historic low. I've been in this business for 39 years, and I've never seen it like this.”
O'Connor noted that Irondequoit and the broader Rochester area have gained popularity in recent years because of the area's affordable home prices.
The area is also the gateway to the Finger Lakes region, a popular tourist destination featuring hiking trails, wine trails, breweries, distilleries, and museums.
Irondequoit is located beside the bay of the same name and on the southern shore of Lake Ontario.
Google Maps
Irondequoit, population 51,000, is located just 6 miles from downtown Rochester.
Several noteworthy universities including the University of Rochester and Rochester Institute of Technology are located in Rochester, while further afield, in the Finger Lakes region, are Cornell University, Ithaca College and other institutions.
Other Rochester attractions include the National Strong Museum of Play and the Seneca Park Zoo. Plus Rochester is home to well-known companies such as Kodak KODK,
Xerox XRX Corporation,
One of the world's largest semiconductor companies, Micron MU,
The company is building a large semiconductor manufacturing facility in nearby Clay, New York, outside Syracuse, and is expected to create nearly 50,000 local jobs and boost housing demand in the area.
“We actually have a lot going for us,” despite the “winter weather reputation,” O’Connor said.
However, meteorology's bad reputation is being called into question. Although it's known for annual snowfall in the range of 100 inches, Rochester saw half that, 50.4 inches, in 2022-23, according to the National Weather Service.
Both Irondequoit and Rochester are notable for their older housing stock, with the typical home built in the 1920s through the 1960s, O'Connor said.
Realtor.com data shows that most people who recently moved to Irondequoit came from New York City, followed by Syracuse and Washington, D.C., based on patterns observed last year from October to December.
“This relatively affordable area has increased in popularity as buyers in the Northeast look for relatively affordable markets,” Hannah Jones, chief economic analyst at Realtor.com, told MarketWatch.
Most of the people who left Irondequoit also moved to nearby Buffalo, Sarasota or Cape Coral, Florida, Realtor.com data showed.
Low inventory due to “lock-in effect”
As is the case in most parts of the United States, inventory is low in Irondequoit and surrounding areas because many homeowners who took out home loans at very low interest rates see little incentive to sell, O'Connor said, while others own their homes free and clear.
Even if they decide to sell, it could be difficult because “home prices have gone up so much,” O'Connor said. Home prices in Irondequoit rose 17.7% in December from a year earlier, according to Realtor.com.
O'Connor's data revealed that in 2023, homes in Irondequoit tended to sell for 20% above their list price, up from selling for more than 16% last year.
“The dilemma we face is: Where are you going to go?” O'Connor said.
“Not only have house prices increased significantly, but… [but] There is also very little stock. Therefore, people either decide not to buy anything, or they postpone it, hoping that things will change in the future.
When analyzing the best markets for first-time homebuyers, Realtor.com looked at the overall availability of homes for sale, compared to the number of families in one market, rather than inventory numbers alone, noted Danielle Hale, Realtor.com's chief economist. “In other words, we look at the level of availability and not whether it is getting better or worse,” she added.
Other promising markets for first-time buyers in 2024
The upstate New York town of Benton, Arkansas was followed; Winterset, Iowa; and Newington, Connecticut, ranked second, third and fourth on Realtor.com's list of the best housing markets for first-time buyers.
Affordable housing was a major factor for those cities as well. Like Irondequoit, home prices in Benton and Winterset — home to many of Madison County's “bridges” and the birthplace of actor John Wayne — were well below the national average, at $197,500 and $269,400, respectively.
Smaller real estate markets are expected to become popular in 2024
While Midwest markets dominated real estate listings last year, 2024 looks set to be a year of smaller markets as buyers face increased competition as mortgage rates decline.
“Although affordability will still be an issue in 2024, a recent Realtor.com poll found that 95% of potential first-time homebuyers overwhelmingly feel they will be able to purchase a home within their lifetime,” Hill said of Realtor.com in a statement report.
If not this year, 40% said they would be able to afford it next year.
Realtor.com is operated by News Corp's Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.
