Smaller metro areas are seeing sharp home-price increases: SmartAsset

While major cities are often the bellwethers when it comes to home-price trends, a SmartAsset analysis of Zillow data released Thursday shows that some secondary and tertiary U.S. metro areas are leading the way for home-price appreciation.

SmartAsset, a personal finance and fintech website, ranked the 100 largest U.S. metro areas based on home-sale price increases during the year ending in April 2024. It also analyzed sale prices during the five-year period beginning in April 2019 to illustrate trends since the start of the COVID-19 pandemic. The analysis included single-family homes, condominiums and co-ops.

“Despite cooling inflation, homes across the U.S. in April sold at prices averaging 6% higher than a year before,“ the report explained. “This indicates demand for homes is still strong, while the supply of inventory underwhelms. While this market could favor those who are looking to sell their homes and move to a less expensive area, hopeful first-time homebuyers may be feeling the squeeze.“

SmartAsset found that Wichita, Kansas, led the nation with annualized sale-price growth of 21.2% in April 2024. Wichita also ranked No. 9 nationally for five-year price growth of 69.1%. Sale prices there have risen from $153,347 in 2019 to $259,264 in 2024.

Smaller metro areas across the country accounted for several of the top 10 markets for one-year home price appreciation. These included Toledo, Ohio (+16.4%); Madison, Wisconsin (+15.3%); New Haven, Connecticut (+12.8%); Grand Rapids, Michigan (+12%); Harrisburg, Pennsylvania (+11%); and Charleston, South Carolina (+10.8%).

The major metros of San Jose and Miami also ranked among the top 10 for one-year sale price growth. SmartAsset noted that “expensive homes in California continue to outpace other markets,“ with the metros of San Jose, San Francisco, Los Angeles, San Diego and Oxnard serving as the nation’s five most expensive markets since 2019.

“While this study did not specifically measure the causes of price increases in each metro area, there are many factors that may be at play in any given location,“ Jaclyn DeJohn, managing editor at SmartAsset, said in a statement sent to HousingWire.  

“For instance, existing homeowners may be less willing to move if they had locked in low interest rates — such as during the pandemic. New construction may also not be keeping up with demand, hiking up the prices of existing homes. Mobility from place to place can also play a large factor, especially with the growing portion of workers with remote flexibility. Jobs, cost of living, climate and many other factors can cause migration trends in either direction.“ 

Smaller metros have also accounted for some of the highest price appreciation in the past five years. Knoxville, Tennessee, led all metros with growth of 89.5%. The average sale price there jumped from $176,407 to $334,279 during the five-year period ending in April 2024.

Other metros in the top 10 for five-year price appreciation were North Port, Florida (+79.3%); Tampa (+77.1%); Miami (+76.1%); Boise, Idaho (+71.1); Tucson, Arizona (+70.1%); Spokane, Washington (+70%); Phoenix (+69.5%); and Palm Bay, Florida (+68.7%).

Some metros bucked the short-term trend by recording price declines. Cape Coral, Florida (-5.3%); Jackson, Mississippi (-3.7%); Birmingham, Alabama (-1.8%); Lakeland, Florida (-0.5%) and Memphis, Tennessee (-0.4%) saw prices decline from April 2023 to April 2024.