Phoenix ranks #2 in the hottest housing markets in the United States

Whether you’re interested in selling your home for a big profit or researching the friendliest market for a first home purchase, House Method conducted a study to rank the hottest (and some of the cooler) real estate markets in the US – and Phoenix ranks #2 among the hottest housing markets in the US

The housing market has exploded in recent years due to volatile mortgage rates, high demand coupled with low inventory, and remote work opportunities that are allowing millions of people to reconsider their home base. Americans have begun to reassess their housing priorities, with many emphasizing space and convenience while others are flocking to bustling metropolitan areas, resulting in an exponential rise in home ownership.


ALSO READ: The 3 hottest neighborhoods in Arizona


We analyzed data on the 100 largest MSAs (Metropolitan Statistical Areas) and ranked them according to seven factors including affordability, inventory and population growth. Read on for the full ranking and explanation of the methodology behind this study.

Some of the most interesting findings:

• Home prices up by one an average of 21% since 2021

• The top 10 markets rarely have listings that have been on the market longer than 15 days, 40% less than the national average (25 days).

• Many of the hottest housing markets are also some of the least affordable as demand rises and supply falls

• Home equity has skyrocketed, allowing sellers to make huge profits

• Home prices are extrapolated increase by a further 14.9% by 2023even with steep mortgage rate hikes

Key takeaways on the hottest housing markets

Below is a ranking of the cities where houses are disappearing from the market the fastest. The following table shows the rank, total score, and rank of the specific factor category. It’s searchable and sortable, so take a look and see how your town has evolved!

Summary of the hottest housing markets

Our analyzes have shown that Tampa-St. Petersburg-Clearwater, Florida tops the list as this year’s hottest housing market. Homes are the shortest on the market before they are sold, selling for top prices and quickly attracting new residents. Low stock levels combined with a fast sales rate contributed to its high score — and it’s important to note that many of the top spots ranked poorly in terms of affordability.

As these hot housing markets continue to gain momentum, we can expect affordability to continue to decline. The other top 5 places were rounded out by:

• Phoenix-Mesa-Scottsdale, Arizona

• Austin-Round Rock, Texas

• Seattle-Tacoma-Bellevue, Washington

• San Jose-Sunnyvale-Santa Clara, California

Jackson, Mississippi, Bridgeport-Stamford-Norwalk, Connecticut, Greensboro-High Point, North Carolina, McAllen-Edinburg-Mission, Texas, and Winston-Salem, North Carolina received the lowest ranking for the hottest housing markets. These markets remain cooler than those that ranked high due to large housing stocks and slower population growth. While it’s still a seller’s market, these MSAs may not disappear from the market as quickly as their higher-tier counterparts.

methodology

To find the hottest housing markets in 2022, we looked at data from the 100 largest MSAs (Metropolitan Statistical Areas) in the United States. We have classified the cities into three categories:

• Affordability

• Inventory

• Growth of population

There were a total of 7 factors in these three broader categories, listed below along with their respective weights. Each city was rated on an 85-point scale, with a score of 85 representing the hottest housing market.

Finally, we took each city’s weighted average across all categories to calculate its heat score and used the results to rank our sample.

Affordability – 45 points

• House Price Change Percentage 2021 vs. 2022 – Double weighting

• Percent Home Price Change 2012 vs. 2022 – Total Weight

• Average price per square foot (measured in hundreds) – total weight

• Majority of available homes below and above the national average of $428,700 (calculated using the average home price and factored into a yes or no ratio) – half weight

Inventory – 35 points

• Average active home entry per month – 1.5 weight

• Average days in market before pending sales – double weighting

Population growth – 5 points

• Percentage change in population growth from the 2010 census compared to the 2020 census data – half weight

Sources

• US Census Bureau

• Redfin

• Zillow

• World population overview

• Kiplingler

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