It may be one of the snowiest cities in America, but Buffalo, New York will be the hottest housing market this year, according to a new report from Zillow.
The real estate company analyzed the top 50 metro areas in the United States and looked at a number of factors to determine the “hottest” market.
This includes the expected increase in home values between December 2023 through November 2024, job availability, speed of home sales, and other factors.
Buffalo rose to the top of the list based on how relatively cheap homes are and the city's strong job opportunities. The typical home in Buffalo is currently worth $248,445, according to Zillow estimates, while the national average is $347,415. If a buyer made a 5% down payment for a home in Buffalo, they would pay $1,792 per month for their mortgage.
One of the key metrics Zillow used to gauge projected housing demand in Buffalo was the number of new jobs being created in the area compared to the number of new homes being built.
The company noted that Buffalo had the highest number of jobs per new housing unit among all 50 cities measured by Zillow. With more jobs, competition for housing is expected to intensify and push home prices higher, unless enough new homes are built to meet that demand, Zilo said.
Buffalo is also known for its extreme winters. During 2022-2023, Buffalo received 133.6 inches of snow, according to the National Weather Service.
“Even though our temperatures are cold, our market is not,” Vienna Lorindi, president of the Buffalo Niagara Association of Realtors and co-broker with Howard Hanna Real Estate Services, told MarketWatch.
Buffalo was also recently designated a federal technology center, along with the cities of Rochester and Syracuse, and is set to receive billions of dollars in federal funding. The money will be used to build the region into a semiconductor manufacturing hub next year.
Former New York Democratic Governor Andrew Cuomo also launched a multibillion-dollar effort called the “Buffalo Billion” to revitalize its economy. The city is also a college town, boasting names like SUNY Buffalo and the University of Buffalo. It is also home to the Buffalo AKG Art Museum and several Buffalo Bills players, including Josh Allen and Dion Dawkins.
“We have a lot of energy in both the city of Buffalo and the city of Niagara Falls,” said Lorindi, a Buffalo resident.
Buffalo also has a large medical campus, which not only brings in business from the medical community, but also from the supporting organizations they need, Lorindi noted.
“We are the largest small city in the United States,” she said.
Lorindi also pointed out that there is a great opportunity to build more new homes in the city.
“We have a tremendous amount of undeveloped land” and “old infrastructure and old buildings that just need revitalization, and that's what our developers are looking at today,” she told MarketWatch. Some of this work also involves looking at old factories and buildings that are no longer in use, “but they have a lot of great character and could be revitalized into something great,” Lorindi added.
Other 'hot' housing markets for 2024
Midwestern cities ranked second, third and fourth on Zillow's list of hottest markets, also because of the availability of affordable homes in those cities. They include Cincinnati, Columbus, both in Ohio, and Indianapolis, Indiana.
“Buyers are definitely going to come back now that the holidays are over,” Lorindi said, especially with mortgage rates falling below 7%.
As is the case in Buffalo, home prices in Cincinnati and Columbus are below the national average — about $300,000 or less in each of the Ohio markets, and a buyer offering 5% would have a mortgage payment of less than $2,200 per month.
“Inventory is moving very quickly in Cincinnati, and Columbus is home to the fastest projected rise in owner-occupied households, which is an indicator of household formation and population growth,” Zilo said.
Cheap markets give young people a “real opportunity to buy”
Midwestern cities dominated real estate listings last year, due to the availability of relatively affordable homes, among other factors, such as a slower pace of life.
“Housing markets are the healthiest where affordable home prices and strong job opportunities give aspiring young people a real opportunity to buy in and start building equity,” said Anushna Prakash, data scientist at Zillow Economic Research.
The hottest housing market last year was Charlotte, North Carolina, according to Zillow. The city fell to seventh place in 2024.
