Housing market breaks records in May
The national median home price jumped 6.8% to $288,000 in May while the number of sales rose 7.5% from last year, according to Redfin, despite the supply of for-sale homes being down 10.9% to 2.7 months — the lowest since the listings website started tracking the figure seven years ago.
For-sale homes moved quickly. The average home went under contract in a record-low 37 days. More than 25% of homes sold garnered more than the list price.
In addition to the coastal markets, Buffalo, NY, Grand Rapids, MI, and Omaha, NE, also saw price gains. For example, in Omaha, which boasts a strong tech sector, the median sales price rose 9.9% year-over-year to $187,000 in May.
Affordable housing is just one reason cities like Omaha, Buffalo and Grand Rapids are becoming desirable places to move, particularly for first-time homebuyers, many of whom are millennials, though prices there are rising, too.
Home prices were up 4.3% year-over-year in Cleveland in March to a reading of 112.8 on the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index. Detroit experienced a 7% increase for the period to a score of 111.01 on the index. (For comparison, prices were up 12.3% in Seattle to a mark of 216.79.) Nationwide, prices rose 5.8% for the year to 186.95 on the index.
The Rust Belt, in particular, is drawing millennials with its combination of low housing costs, rebounding job markets and strong local culture, according to research by The Pew Charitable Trusts. The region also tends to offer more affordable housing, lower taxes and reduced traffic compared to larger metros.
These cities are counting on millennials to spur their next phase of growth. In Buffalo, one developer is building a 13-acre, $48 million multifamily project complete with running paths, vehicle charging stations and a health and wellness center. To make sure it reaches the right group, the developer is reserving 80% of the apartments for residents earning 60% or less than the area median income for a four-person household. The remainder of the units will be earmarked for those earning between 60% and 120% of the AMI.
In a report earlier this year, the Urban Land Institute charged the Great Lakes cities, in particular, with stepping up to attract and retain young families and immigrants, and to improve local workforce development initiatives.