Market Heatwave: Unveiling the Top 10 Hottest Housing Markets in 2024 - But Is It Time to Consider Alternatives? Explore the Options!

The forecast from the real estate marketplace Zillow indicates that this year's top 10 hottest housing markets will be distributed across the South, Northeast, and Midwest. However, the designation of a "hot" market may not necessarily be advantageous for prospective buyers.

Buffalo, New York, claims the top spot on the list due to the anticipated surge in job growth compared to the number of approved construction permits for new homes.

Orphe Divounguy, a senior economist at Zillow, explained, "In markets where there's expected to be significantly more job creation than available housing supply, homes are likely to sell quickly, leading to robust appreciation in home values."

The compilation of the list is rooted in an examination of home value appreciation, the duration it takes to sell a home, and the correlation between job growth and housing supply. This crucial information can assist you in determining potential locations for a home search, as well as identifying areas that may be less desirable.

1.	Buffalo, NY	6.	Atlanta, GA
2.	Cincinnati, OH	7.	Charlotte, NC
3.	Columbus, OH	8.	Cleveland, OH
4.	Indianapolis, IN	9.	Orlando, FL
5.	Providence, RI	10.	Tampa, FL

What a ‘hot’ market means for buyers

"Market heat" is defined by the intensity of competition among buyers; when the number of buyers exceeds the number of sellers, it indicates a hot market, according to Divounguy.

"In these areas, competition among homebuyers will be intense," he explained. "However, having the hottest market doesn't necessarily equate to market health."

Market growth in certain areas may not align with the creation of new jobs. For example, Florida is drawing in baby boomer residents who are seeking warmer, tax-friendly retirement locations, as noted by Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors.

Lautz emphasized that while the notion that "the largest share of homebuyers are baby boomers looking for warmer climates" is a common idea, it holds true. "They're exploring warmer regions, attracted by favorable tax conditions and improved housing affordability."

Additionally, baby boomers, being the generation with the majority of wealth, may include cash buyers, utilizing their home equity for purchases.

Where the housing market is cooling

In contrast, home values are anticipated to decrease this year in the "coolest markets," referring to places that will experience lower competitiveness. These locations include New Orleans, San Antonio, Denver, Houston, and Minneapolis.

The decline is linked to affordability; if a market becomes less affordable, it is unlikely to witness the same level of market heat, explained Divounguy.

Denver, for example, was a sought-after destination for homebuyers during the pandemic, but it has evolved into an area where affordability is now constrained.

"Denver experienced a significant influx of population," noted Lautz. "Identifying the next emerging market will be crucial for buyers."

Millennials are expected to be significant buyers, as most are in their prime homebuying age, and some have reached their peak earning potential. Unlike baby boomers, who are searching for retirement-friendly areas, this generation may be looking for employment opportunities or the flexibility to work remotely in new locations.