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December 26, 2017

The Hottest Real Estate Markets of 2017: Who Gained Big, Who Fell Hard

Each month at realtor.com®, we identify the country’s hottest metropolitan markets for real estate—the ones whose homes attract the most listing views and spend the fewest days on market as buyers snap them up. Sometimes we see places dominate the top of the list for months without a break; other times we see quick rises and even quicker falls, as the economic circumstances of key players change.

So as we near the end of the year, we decided to take stock: What were the flat-out hottest real estate markets of 2017—and which were the ones whose fortunes changed the most?

The year’s five biggest success stories illustrate the comebacks and challenges faced by Americans across the country, as home prices marched steadily upward, pushed by the perennial shortage of homes for sale.

The biggest gainer: Cincinnati, which jumped 53 spots to land at No. 64 on the overall hottest markets list (drawn from the 300 largest metropolitan areas). Like much of the Midwest, Cincinnati offers homes with prices that are actually within reach for many buyers.

“Cincinnati is all about relative affordability; it’s one of the last affordable pockets of inventory available in the country,” says Javier Vivas, manager of economic data for realtor.com.

Relative affordability is also the key selling point for Riverside, CA, which went up 34 spots, and Phoenix, which went up 24. About 60 miles east of downtown Los Angeles, Riverside is a bargain oasis in uber-expensive California, whereas  Phoenix appeals to cost-conscious buyers along the western swath of the country.

The story in Las Vegas, which vaulted 36 spots to No. 53, is a little different.

“Good economic momentum and new construction in Las Vegas are really powering its rise,” Vivas says.

The markets that moved up the most

Metropolitan Market Rank Rank Change Median List Price
Cincinnati, OH 64 +53 $217,000
Las Vegas, NV 53 +36 $276,000
Riverside, CA 94 +34 $368,000
Milwaukee, WI 47 +32 $222,000
Phoenix, AZ 63 +24 $319,000

For other markets, it seems like the good times rolled to a halt—or at least slowed to a crawl—in 2017. Nowhere was this truer than in the Miami area, which tumbled 61 spots to No. 261.

That’s largely because Miami’s real estate market was muy caliente in 2016, setting a bar that was hard to beat. Throw in a couple of hurricanes, and you can see how things got soggy. Still, we’re optimistic about a recovery—we put Miami on our list of the top 20 cities expected to see the most growth in home sales and prices for 2018.

It’s not an entirely sad story for the next two biggest “losers” on the list, either.

“Austin and Oklahoma City have just reached the ceiling in terms of their growth,” says Vivas. “Austin, in particular, has been heating up for four to five years, with strong millennial demand, in particular.” That’s probably because of its vibrant tech sector, cultural scene, and, yep, the barbecue.

The markets that fell the hardest

Metropolitan Market Rank Rank Change Median List Price
Miami, FL 261 -61  $379,000
Austin, TX 92 -54  $381,000
Oklahoma City, OK 128 -36  $226,000
Richmond, VA 108 -35  $289,000
New Orleans, LA 100 -33  $268,000

Finally, the full list of the hottest markets for 2017 carries on the themes we’ve seen throughout the year. California has been the nation’s star performer, and here it dominates the top six spots—with scrappy Vallejo on top. This once-gritty Bay Area town was anything but a real estate mecca a couple of years back, but it’s risen as a viable housing alternative in the San Francisco Bay Area,  a region plagued by high prices and low inventory.

California’s wildfires, though, are taking a toll: Fire-ravaged Santa Rosatumbled seven spots, out of the top 10, to land at No. 16. And while we’re not yet seeing the effects on housing from the huge Thomas fire, which broke out on Dec. 4, Oxnard (No. 17) lies just south of its southern perimeter.

The West and Southwest are also represented on the top 20, with a scattering of Midwestern cities in the mix.

The hottest markets of 2017

Metro Rank Rank Change
Vallejo, CA 1 +1
San Francisco, CA 2 -1
San Jose, CA 3 +4
Sacramento, CA 4 +4
Stockton, CA 5 +1
San Diego, CA 6 -1
Columbus, OH 7 +3
Colorado Springs, CO 8 +5
Dallas, TX 9 -6
Denver, CO 10 -6
Detroit, MI 11 0
Modesto, CA 12 0
Yuba City, CA 13 +4
Fort Wayne, IN 14 0
Boston, MA 15 +4
Santa Rosa, CA 16 -7
Oxnard, CA 17 -2
Fresno, CA 18 0
Midland, TX 19 +10
Kennewick, WA 20 +4

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