The increase in remote work during the pandemic drove many consumers to relocate to places with larger properties, more land and better affordability over the past year. And with mortgage rates at historic lows, homes were sold at a breakneck speed and at astronomical rates of price growth. Listings flying off the market quickest in the first half of 2021 weren’t in the typical metropolitan areas. Smaller, secondary cities saw their properties last the fewest days on the marketplace before going under contract.
“By definition, the ZIPs that make our annual hottest report are very competitive, but this year they are white hot,” said Danielle Hale, Realtor.com’s chief economist. “Homes in this year’s ZIPs are under contract in less than a week, which is three times faster than the contract times for last year’s hottest markets.”
Realtor.com’s analysis included over 29,000 ZIP codes based on the time it takes properties to sell and how frequently homes are viewed between January and June of 2021. Only one ZIP code could be used per metropolitan area and needed at least 13 active listings each month to qualify for the study. The markets here are sorted first by time and then by annual growth in views in case of ties.
From New England to the Rocky Mountains, local lenders from the top 10 ZIP codes talk about what fuels the fervent buyer demand in their areas.
10. Concord, New Hampshire (03301)
Annual growth in listing views: 162%
Local lender: Rafael Diaz-Alvarez, senior loan officer at Northpoint MortgageWhy is the Concord market so hot?
I think the biggest takeaway is that typically, in any given month we have more properties on the market than we have listings sold. Starting in May of last year, that flipped.
The lack of inventory coupled with the low interest rates really created an intense demand. Plus, the influx of out-of-state buyers — and the out-of-state buyers who can pay cash or are coming with large down payments — have contributed to prices being driven up. There’s no need for appraisals or they just pay the difference.
9. Detroit, Michigan (48336)
Annual growth in listing views: 122%
Local lender: Paul Apostolakis, owner at Omega Lending GroupWhy is the Detroit market so hot?
It’s a wild market. Our jobs here are doing well. Our economy is growing. We just don’t have enough houses on the market to sustain the demand and we’re running out of land. The metro area doesn’t really have places to build houses, so when a house does come up for sale, it goes quickly.
A lot of people are buying a house and guaranteeing the price up until whatever value. On one deal we had, someone gave a $100,000 appraisal guarantee on a $300,000 house and ended up paying $400,000 for the home. I think the coronavirus accelerated what already was a very tight housing market. If people didn’t like where they live, they really felt like they needed to find a new house or more property for themselves.
8. Rochester, New York (14617)
Annual growth in listing views: 112%
Local lender: Nick Castronova, managing director at Oxford CapitalWhy is the Rochester market so hot?
We saw it just explode. By September 2020, demand was absolutely through the roof and that’s continued to this point and I just shake my head on a constant basis. We’ve seen houses that were $125,000 selling for $175,000. Now realtors are saying, if you qualify someone, we have to assume that we’re gonna be 30% over ask on anything.
A couple came from Manhattan and bid on a property listed at $289,000. We had an escalation clause up to $345,000 and lost the deal because it sold around $360,000. We’re seeing that over and over again. Clients are having to guarantee their offers even if the house doesn’t appraise anywhere close. This to me becomes a slippery slope where only supply and demand dictate the market.
7. Worcester, Massachusetts (01757)
Annual growth in listing views: 264%
Local lender: Sammy Iliopoulos, senior loan officer at Guaranteed RateWhy is the Worcester market so hot?
People are moving to the Worcester area, and a lot of people in the Worcester area are looking to invest some of their money, primarily in multifamily. They’re a lot more affordable than the Boston area and that’s obviously a big help.
In most counties surrounding Boston, borrowers would need to take out jumbo loans for the homes they can still get under the conventional mortgage limit in Worcester. This increases their affordability and also increases their chances of getting financing.
6. Columbus, Ohio (43228)
Annual growth in listing views: 80%
Local lender: Aric French, branch manager at Guild MortgageWhy is the Columbus market so hot?
We are coming off levels of business I haven’t seen in my 10-year career.
One recent transaction was in contract, with an escalation clause, $45,000 over list price, with a full appraisal gap. The price of the home was already super aggressive, based primarily on what others in the neighborhood sold for. The appraisal came back $60,000 short and the buyer was obligated to pay this out of pocket, in addition to the down payment and closing costs of the loan. Oh, and the buyer paid $5,000 of seller fees as well.
My wife and I bought a new build last year in a desirable neighborhood. The base price, before any upgrades, shot up over $200,000 because of build price increases. That’s a 33% increase in 15 months. That should be impossible.