Key Findings
- Greenville, SC is the hottest real estate market so far in 2022 due to strong price growth and short selling time
- Albany, NY is the coldest market, due to stagnating home prices and a 68% decline in homes sales
- Average sold price of a home in the U.S. is $347,900 so far in 2022 – 13% higher than last year
- Nationally, the real estate inventory is down 20% year-over-year, with only four metros reporting higher number of homes for sale compared to 2021
- On average, homes stay on the market for nine days, but in Columbus, OH and Kansas City, MO, the average is less than four days
- Around 1 in 10 (11%) homes on sale had their price reduced, the most affected being Boise, ID, where 18% of listings saw a price cut
Over the last two years, the American real estate market has seen home prices setting new records, with homes selling at unprecedented speed.
Today, with rising inflation and mortgage rates, the upward trend continues, but cracks in the monolithic growth are starting to show.
In this uncertain climate, which real estate markets remain hot, which are cooling, and which are outright cold?
Hot or Not? How We Ranked Housing Markets in U.S. Metros
Instead of focusing on one metric like growth in prices or speed of sales, we took a more comprehensive approach. For the purposes of this study, we deem a real estate market to be “hot” if:
- Prices and number of sales trend upwards
- Homes sell quickly
- Real estate inventory is low
- Price cuts are rare
Conversely, if prices are plateauing, homes are taking longer to sell, or are sold at a reduced price, we defined the market as “cold” or cooling off.
Go Greenville: South Carolina Metro Tops Hot Markets List
Utilizing the above metrics, we compared 93 of America’s largest metros, encoding the results just like air temperature: from 20º to 120º Fahrenheit.
Check out the resulting ranking of metropolitan areas in the United States in the interactive chart below:
The metro with the hottest home market so far in 2022 is Greenville, SC.
Coming at 88.9º out of a possible 120º, Greenville, SC continues to see prices rising at an average of 18% year-over-year, and homes in this metro are selling in an average of five days.
“At the national level, the average sale price of a listing according to Zillow was at $347,900 so far in 2022, which is 13% higher than during the same period last year.”
The second hottest market is Richmond, VA. It owes its high temperature of 85.5º to a trend-defying increase in home sales (+22% year-over-year) and speedy home sales. At five days from listed to pending to close, homes in Richmond are spending fewer days on the market so far in 2022, compared to most other metros in the country.
It is worth noting that three out of the top 10 hottest markets in the United States are in Texas– El Paso (85.3º), Dallas-Fort Worth (80.5º), and San Antonio (74.5º).
Confirming local news reports, two North Carolina metros – Durham (78.8º) and Raleigh (74.3º) – are all among the hottest home markets in the United States. In both of these metros, homes are selling faster (five days, down from six) and at prices that are 20% higher than last year.
California Cool: 4 out of 10 Chilliest Markets Are in The Golden State
Albany, NY is the coldest market in the nation with a temperature of 25.6º. Sale prices are only 3% higher than last year, the number of homes sold is down 68% year-on-year, and the share of homes selling at reduced prices checks in at 11%.
“Greenville, SC continues to see prices rising at an average of 18% year-on-year, and homes in this metro are selling in an average of five days.”
The second coolest real estate market is in Stockton, CA at 31.6º. While homes in this metro continue to appreciate (+12% since 2021), they’re selling slower than last year (ten days, up from seven in 2021) and 12% of homes are selling with a price cut (up from 5% last year).
Three more metropolitan areas in California make it into our top 10 coldest markets list: Sacramento (36.8º), San Francisco (44.2º), and Bakersfield (46.3º), mostly due to a mixture of slower sales, and many more homes having to reduce prices in order to be sold.
Three more of the coldest markets are in the Midwest. Milwaukee, WI (35.9º) is one of the few metros where prices barely grew year-on-year (+1%), with homes taking longer to sell than in most places (27 days).
In Chicago, IL (42.0º) and Minneapolis-St Paul, MN (45.5º), growth in sale price has been at 7-8%, which is roughly the inflation rate, with approximately 20% fewer homes sold in 2022 versus the same period last year.
Key Real Estate Trends in 2022
What are some of the key trends that keep some markets hot and others cool? When putting together our market temperature index, we discovered four features defining the climate on the real estate markets in the United States.
1) Prices are up despite lower sales
At the national level, the average sale price of a listing according to Zillow was at $347,900 so far in 2022, which is 13% higher than during the same period last year.
At the same time, the number of homes sold is down compared to 2021 in almost all metros, except Richmond, VA (+22%), Toledo, OH (+4%), El Paso, TX (+2%) and Philadelphia, PA (+2%).
2) Inventories are still down, stifling supply
Just seven metros out of the 93 we analyzed saw their real estate inventory increase in 2022 compared to last year’s figures. They are Stockton, CA (8%), Boise City, ID (7.1%), Riverside, CA (1.9%), Austin, TX (1.7%), Colorado Springs, CO (1.3%), Sacramento, CA (0.2%) and Tucson, AZ (0.2%).
Elsewhere, inventories are down year-over-year, indicating that the housing supply is still struggling to keep up with demand.
3) Homes are selling faster, though boom towns slowing down
Overall, homes tend to stay on the market for an average of nine days. In the majority of metropolitan areas we profiled, homes are selling faster than last year, with the most notable exceptions being Austin, TX and Boise, ID, where so far in 2022, homes are taking twice as long to sell compared to last year.
4) More homes are selling with a price cut
Around 11% of listings had their price reduced so far in 2022, compared to 9% the year before. In Boise City, ID (18%), New Orleans, LA (16%), Provo, UT, and Salt Lake City, UT (both 15%) have the highest average share of homes selling for less than originally listed.
Sources & Methodology:
The data on six key real estate indicators was taken from Zillow & Redfin. These indicators are:
- Home sale price
- Number of home sales
- Days on the market
- Inventory
- Share of listings with a price cut
For each of these indicators, we took an average value across the first seven months (or six, depending on data availability) of 2022 and compared it to the corresponding average from 2021 to evaluate the heating up/cooling down dynamic.
Or final ranking is based on a total of nine factors, each weighed to add up to 120 points/degrees, with 0 being the coldest and 120 being the hottest. The factors were weighted as follows:
- Avg. Home Sale Price 2022: 5 points
- Avg. Home Sale Price YoY: 25 points
- Avg. Monthly Sales 2022: 5 points
- Avg. Monthly Sales YoY: 25 points
- Avg. Homes in Inventory YoY: 15 points
- Median Days on Market 2022: 15 points
- Median Days on Market YoY: 10 points
- Pct Listings w/ Price Cut 2022: 15 points
- Listings w/ Price Cut YoY: 5 points
To explore the data on all the metros in our analysis, have a look at the interactive table below.
Illustrations by Catalina Parra
