The white hot housing market may have sent home prices soaring in 2021, but there are still some places that remain undervalued — for now.
The National Association of Realtors (NAR) looked over the roughly 400 housing markets in the United States and identified 10 as “hidden gems,” all of which are located in South and Southwest. These markets are attracting new residents because of strong wage and job growth, younger populations and good access to broadband service (a critical piece of infrastructure for remote workers).
And crucially, they’re home to real estate that’s still cheap given the relatively high median family income in the area.
The hidden gem housing markets of 2022
Here are the 10 hidden gem housing markets of 2022 (in alphabetical order), according to the NAR. All of the metro areas listed have a population of at least 200,000. They include the main city listed as well as surrounding towns and suburbs (possibly in multiple states).
- Dallas-Fort Worth, Texas
- Daphne-Fairhope-Farley, Alabama
- Fayetteville-Springdale-Rogers, Arkansas-Missouri
- Huntsville, Alabama
- Knoxville, Tennessee
- Palm Bay-Melbourne-Titusville, Florida
- Pensacola-Ferry Pass-Brent, Florida
- San Antonio-New Braunfels, Texas
- Spartanburg, South Carolina
- Tucson, Arizona
The Daphne-Fairhope-Farley, Alabama, area had the fastest population growth, NAR found, while the Fayetteville, Arkansas, area had the fastest job growth over the last three years.
Knoxville, Tennessee, had some of the most affordable home prices, with the median value of property coming in at $228,878.
What homebuyers should expect in 2022
While the markets listed above offer good value in the grand scheme, overall it's been a very difficult time for buyers to find affordable places to live. And there isn't much sign prices will go down soon.
The housing market broke record after record this past year, with mortgage rates plummeting and most homes selling above their asking prices. The ultra-competitive market even prompted some would-be homebuyers to give up on their searches entirely. Luckily, the market as a whole seems likely to be calmer next year, with price growth expected to slow in the coming months (though you shouldn’t expect a buyers market anytime soon).
A group of 20 economic and housing experts surveyed by the National Association of Realtors expects median home prices to rise by 5.7% next year, compared to a 4% rate of inflation. The median price of new homes was up 17.5% on a yearly basis this October, while the median price of existing homes was up 13.1%.
But for these 10 markets, the biggest housing boom may be yet to come. "Several markets did reasonably well in 2021, but not as strong as the underlying fundamentals suggested,” NAR chief economist Lawrence Yun said in a release accompanying the list. “Therefore, in 2022, these ‘hidden gem' markets have more room for growth."