by Rafael Pena
March 22, 2024
The housing market frenzy witnessed since the onset of the pandemic is showing no signs of slowing down, particularly in Southern metros.
According to a new projection by Capital Economics’ property economist, Thomas Ryan, Fortune reports that the housing market frenzy witnessed since the onset of the pandemic is showing no signs of slowing down, particularly in Southern metros.
While national averages indicate a nearly 50% increase in house prices since the pandemic’s start, Ryan emphasizes the significant regional variation in this surge. Southern metros, in particular, have emerged as frontrunners in appreciation, with Miami, Tampa, and Charlotte witnessing staggering rises of 74%, 71%, and 62%, respectively, since December 2019.
Ryan attributes this phenomenon to a “boost to housing demand from strong economic in-migration” in the South. He notes that while other major and midwestern metros saw less substantial increases, Southern metros continue to outperform, driven by robust job markets and favorable tax and regulatory environments for companies.
“Employment growth in the South isn’t weakening due to its thriving job markets, partly because of more favorable taxes and regulations for companies,” Ryan explains. Moreover, the newfound ability to work remotely has spurred migration to Southern cities due to their affordability compared to pricier Western and major metropolitan areas.
According to USA Today, Bankrate’s Housing Heat Index, which analyzed 212 metro areas, reveals that the South, often hailed for its affordability and growth opportunities, continues to attract homebuyers and maintains robust housing market fundamentals despite nationwide declines.
“The momentum in the housing market has shifted to the Sun Belt, especially to Georgia, the Carolinas, and Florida,” notes Bankrate analyst Jeff Ostrowski. “This region’s comparatively affordable prices are attractive to buyers moving in from more expensive parts of the country — but the still-strong values create challenges for first-time buyers.”
Among the standout areas is Gainesville, Georgia, which tops the index with an impressive annual home value appreciation of 21%. Despite the price surge, the median home price in Gainesville remains below the national median, offering affordability amid growth.
“Take lower-cost and lower-tax areas that continue to add population, add in limited inventory of homes for sale, and you have the recipe for housing market strength,” explains Greg McBride, chief financial analyst for Bankrate.
The allure of these Southern metros lies in their affordability, employment opportunities, and population growth. Gainesville boasts an unemployment rate of just 2.6%, reflecting its resilience amid economic challenges.
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