The U.S. housing market over the past year has warmed to searing, with house prices reaching record-highs in five of the first six months of the year. Earlier we looked at the local markets where prices rose the fastest. Now Realtor.com has published its annual list of areas where homes are selling the fastest. Home seekers are willing to relocate, thanks in no small part to remote-work allowances that emerged as a result of the pandemic, and they are scouring the country for metros that offer the most space for their money. Those conditions make for a very competitive climate. That made earning a spot on this year's "Hottest ZIPs" list a formidable feat for the 80916 (East Colorado Springs, Colorado), 14617 (West Irondequoit, New York), 01960 (Peabody, Massachusetts), and the rest of the top 10 (see full list below).
Realtor.com's Chief Economist Danielle Hale explains just how fast homes in these ultra-attractive neighborhoods are selling.
"Homes in this year's ZIPs are under contract in less than a week, which is three times faster than the contract times for last year's hottest markets," Hale said. "While there's no question that buyers have faced a challenging housing market during the pandemic, our Hottest ZIPs list also highlights some of the silver linings. The rise in remote work has given some buyers more flexibility to live wherever they want, and many are finding larger homes at lower prices, as well as a higher quality of life, in the 2021 Hottest ZIPs."
The desire for more space is evident when examining the data behind this year's list—homes in the top 10 neighborhoods are 110 square feet larger on average than the typical U.S. home for sale. The lists reflects homebuyers' want for nearness to local amenities and outdoor activities and a lessening attraction to robust city life.
The list also favored areas with relatively large populations of high-income millennials who already owned homes and areas with robust job markets attractive to younger and mid-career adults.
The median household income for millennials aged 25-34 in the ZIP codes on the list is $71,127, which is 6.7% higher than the national average for this group at $66,661.
Older millennials (35-44) in the top 10 neighborhoods earn a median household income of $88,698. That's 6.3% above the national average for this demographic. So the "hottest ZIPs" are home to a large population of mid-to-older millennials who have established a solid financial foundation in metros where their dollars go further, according to the researchers.
"Building on older millennials' success establishing themselves as homeowners in up-and-coming areas across secondary metros, younger millennials are pioneering into new ZIPs where relatively higher incomes make them more competitive buyers," said Realtor.com Senior Economist George Ratiu, who added that conditions related to the pandemic perhaps made owning a home more doable for younger adults who might otherwise have waited a bit.
"Prior to COVID, homeownership may have been a few years off for younger millennials, many of whom are building their careers, but flexible work arrangements are now enabling some to make a homebuying play," he said.
The full list, which includes the nation's top 50 hottest ZIPs, is available on Realtor.com.