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Smaller metropolitan areas are seeing sharp increases in home prices: SmartAsset

While big cities are often the driving force when it comes to house price developments, a SmartAsset analysis of Zillow Data released Thursday shows some secondary and tertiary metro areas in the U.S. are leading the way in home price growth.

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

“Despite cooling inflation, US homes sold in April at prices that were on average 6% higher than a year earlier,” the report said. “This indicates that housing demand is still strong, while inventory supply is disappointing. While this market could benefit those looking to sell their home and move to a cheaper area, hopeful first-time homebuyers may feel the pressure.”

SmartAsset found that Wichita, Kansas, led the nation with annual sales price growth of 21.2% through April 2024. Wichita also ranked ninth nationally for five-year price growth of 69.1%. Sales prices there have increased from $153,347 in 2019 to $259,264 in 2024.

Smaller metro areas across the country accounted for some of the top 10 markets for annual home price increases. These include Toledo, Ohio (+16.4%); Madison, Wis. (+15.3%); New Haven, Connecticut (+12.8%); Grand Rapids, Mich. (+12%); Harrisburg, PA (+11%); and Charleston, South Carolina (+10.8%).

Major metro areas San Jose and Miami were also among the top 10 in one-year sales price growth. SmartAsset noted that “expensive homes in California continue to outpace other markets,” with the San Jose, San Francisco, Los Angeles, San Diego and Oxnard metros making up the nation’s five most expensive markets as of 2019.

“While this study did not specifically measure the drivers of price increases in every metro area, there are many factors that may be at play in a given location,” Jaclyn DeJohn, editor-in-chief at SmartAsset, said in a statement to HousingWire.

“For example, existing homeowners may be less willing to move if they had locked in low interest rates – as they did during the pandemic. It may also be that new construction does not keep up with demand, causing the prices of existing homes to rise. Mobility from place to place can also play a big factor, especially with the growing number of workers with remote flexibility. Jobs, cost of living, climate and many other factors can drive migration trends in either direction.”

Smaller metro areas are also responsible for the highest price increases in the past five years. Knoxville, Tennessee, led all metro areas with 89.5% growth. The average sales price there rose 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 increases 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 metro areas bucked the short-term trend by recording price declines. Cape Coral, Florida (-5.3%); Jackson, Mississippi (-3.7%); Birmingham, AL (-1.8%); Lakeland, Florida (-0.5%) and Memphis, Tennessee (-0.4%) saw prices drop from April 2023 to April 2024.