After years of soaring real estate prices in popular coastal areas, demand has notably slowed in these markets as home prices have far exceeded wage growth.
Now, it’s smaller, midwestern cities that are gaining all the traction, with real estate in these heartland markets seeing lots of action.
According to a recent article in The Wall Street Journal, the housing market has illustrated a noticeable shift in activity toward the center of the country.
The article, which quotes a number of midwestern Realtors, describes red-hot markets that are seeing so much interest, prices are rising and bidding wars are commencing as a shortage of inventory – particularly for starter homes – has buyers competing for properties.
Redfin CEO Glenn Kelman described the weight of this shift to the Journal, noting that the heartland “used to be flyover country, and now it’s saving our bacon.”
The Journal notes that while the economy has been strong, the housing market has not parodied this strength. Instead, home sales have lagged as houses languish on the market for days.
“That divergence has stumped economists,” the article notes. “But the growing strength of housing markets in the heartland suggests that strong economic fundamentals are helping, just not where prices have already grown faster than incomes for seven years.”
But will the action in the Midwest be enough to prop up the housing market as a whole?
That remains to be seen, the Journal states, noting that “slower growth or price declines in the biggest metro areas have weighed heavily on national home sales figures.”