Billings, Mont., Is the new number 1 in the Wall Street Journal / Realtor.com Emerging Housing Markets Index, bolstered by its accessibility and appeal to remote workers.
The index reflects how the real estate boom sparked home buying activity in small and mid-sized US cities. The top 20 cities in the ranking have an average population of just over 300,000 inhabitants.
In the latest ranking of the index released Tuesday, small towns dominate. Metropolitan area # 2 is Coeur d’Alene, the lakeside town in Idaho that held # 1 when the index was created in April. Fort Wayne, Indiana, Rapid City, SD, and Raleigh, NC round out the top 5.
The index identifies major metropolitan areas for home buyers looking for an appreciating housing market and attractive lifestyle amenities. This quarter’s version added the new property tax criteria, which caused some areas in the Northeast, Midwest and Texas with higher property taxes to drop in rankings.
The strengthening of the US economy also played a role, rewarding cities where jobs and wages have increased the most. Rapid City and Raleigh each jumped about 100 spots from the previous quarter.
Billings, Montana’s largest city, fell from fourth to first due to its low unemployment rate, affordability, and booming housing market. With a metro area population of around 184,000, Billings had an unemployment rate of 3% in May, about half the national rate.
Much of the strength of the Billings housing market is due to out-of-state buyers, from coastal states like California and Washington to Kentucky and Texas, said Deb Parker, broker-owner of Parker & Co. Real Estate Services in Billings. Many are moving to the area because they have the option to work remotely, she said.
“I believe Montana has really been discovered,” Ms. Parker said. “I have never seen so much money in our market.”
About 65% of pageviews on Billings’ property listings were from outside the metro area in the second quarter, up from about 57% a year earlier, according to Realtor.com.
parent company of the Wall Street Journal, operates Realtor.com.
Billings, surrounded by several mountain ranges, was founded as a 19th century railway town. Today, new residents are drawn to the area’s hiking trails and other outdoor activities. Yet unlike some small American towns, where second home buyers have played a notable role in setting up and increasing home prices, about 3% of Billings homes are vacation properties, according to Realtor.com. .
Like much of the West, Billings is currently experiencing extreme heat. The National Weather Service has issued a red flag warning in the area, which indicates weather conditions that could accelerate the spread of wildfires.
Emily and Travis Elwood decided during the pandemic that they wanted to move out of Portland, Oregon, where they were renting a two-bedroom apartment. They visited Billings last summer and were drawn to its size and affordability. “Frankly, [we] were never going to be able to buy a house in the Portland area, ”Ms. Elwood said. “We just wanted something a little smaller, a little tighter.”
Ms. Elwood continued to work in Oregon from Montana, and Mr. Elwood found new employment with Billings in a dental company. They moved in October and bought a three bedroom house in June for $ 316,000. Their monthly mortgage payment is lower than their monthly rent in Portland, Ms. Elwood said.
Small Montana markets, including Bozeman, also saw an influx of buyers during the pandemic. Some of the top reasons out-of-state shoppers chose Montana were safety and security, concerns about Covid-19 and the state’s smaller population, according to a survey of Montana Realtors by Montana State University Billings last summer.
The average selling price of a single-family home in Billings and surrounding areas was $ 376,248 in June, up 32% from the previous year, according to the Billings Association of Realtors.
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As in many markets across the country, the number of homes for sale is very low. There were 392 single-family dwellings in the Billings area in June, up from 433 a year earlier, the association said.
“There wasn’t much there,” said Claire Alden, who started shopping in Billings with her husband, Deaver Alden, this spring. “There was only one or two on the market at a time that we would consider at all.”
After the Aldens made their first offer for a house, they discovered that the seller had already accepted a cash offer on the same day the house was put on the market. They ended up buying a four bedroom house in June with a shed in the back which they plan to convert into a rental property.
The Wall Street Journal / Realtor.com Emerging Housing Markets Index ranks the 300 largest metropolitan areas in the United States. In addition to housing market indicators, the index incorporates economic and lifestyle data, including unemployment rate, wages, commuting time, and small business loans.
Home prices in the index’s top 20 markets rose 13.7% on average over the past year, surpassing an 8% increase for the 300 zones, but the top 20 zones still had a d ‘Median listing lower than that of the market as a whole, Danielle said. Hale, Chief Economist at Realtor.com.
Write to Nicole Friedman at [email protected]
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