The housing market is in an Empire State of mind this year, with another snowy city in upstate New York landing the top spot in a ranking of 2024’s top housing markets.
To rank the best areas for first-time buyers, Realtor.com analyzed markets based on several factors, including inventory, home prices, expected home-price appreciation, “culture and liveliness,” and commute times.
Irondequoit was lifted to the top of the list by, along with the affordability of its housing stock, the expected growth in the value of those homes. The median listing price as of November was $187,000, which is substantially lower than the national median of $382,230.
If a buyer put 5% down on a typical Irondequoit home, the monthly mortgage payment would be less than $1,200 a month.
But good luck finding a home to buy. Inventory in Irondequoit was so low in December that homes on the market were being snapped up after 27 days, versus the national average of 61 days, according to Realtor.com data.
There were 11.5% fewer homes for sale there in December than a year earlier, according to data from Realtor.com, which looked at the ZIP codes 14609, 14621, 14622 and 14617.
“We have nothing,” Michael O’Connor, president of the Greater Rochester Association of Realtors, told MarketWatch. “We are at a historic low. I’ve been in the business for 39 years, and I’ve never seen it like this before.”
Irondequoit and the broader Rochester area have gained popularity in recent years because of how affordable homes in the area are, O’Connor noted.
The area is also a gateway to the Finger Lakes region, a popular tourist destination that boasts hiking and wine trails, breweries, distilleries and museums.
Irondequoit, with a population of 51,000, is just 6 miles from Rochester’s city center.
Several noteworthy universities including the University of Rochester and the Rochester Institute of Technology are in Rochester, while farther afield, in the Finger Lakes area, are Cornell University, Ithaca College and other institutions.
One of the world’s largest semiconductor companies, Micron
is building a large semiconductor-fabrication facility in nearby Clay, N.Y., outside Syracuse, and is expected to create nearly 50,000 local jobs and boost demand for housing in the region.
“We actually have a lot going for us,” O’Connor said, despite the “reputation for the winter weather.”
However, that meteorological notoriety is being called into question. Despite being known for annual snowfall in the range of 100 inches, Rochester saw half that, 50.4 inches, in 2022-23, according to the National Weather Service.
Both Irondequoit and Rochester are characterized by their older housing, with the typical home having been built in the 1920s through the 1960s, O’Connor said.
Most people, Realtor.com’s data show, who have moved recently to Irondequoit came from New York City, followed by Syracuse and Washington, D.C., based on patterns observed last year from October to December.
“This relatively affordable area has grown in popularity as buyers in the Northeast look for relatively affordable markets,” Hannah Jones, senior economic analyst at Realtor.com, told MarketWatch.
Most of the people leaving Irondequoit, meanwhile, moved to nearby Buffalo, or to Sarasota or Cape Coral in Florida, the Realtor.com data showed.
Low inventory due to ‘lock-in effect’
As in much of the rest of the U.S., inventory is low in Irondequoit and nearby areas because many homeowners who took out home loans at ultralow interest rates are seeing little incentive to sell, O’Connor said, while others own their homes free and clear.
Even if they decide to sell, it can be difficult because “housing prices have gone up so much,” O’Connor said. Home prices in Irondequoit were up 17.7% in December compared with the previous year, according to Realtor.com.
O’Connor’s data revealed that, in 2023, homes in Irondequoit tended to sell at 20% over their list prices, up from selling over 16% a year ago.
“The dilemma we run to,” said O’Connor, is “where will you go?”
“Not only have home prices increased dramatically, [but] there’s also very little inventory out there. So people either decide not to buy anything, or they put it off, hoping things will change in the future.”
Realtor.com’s chief economist, Danielle Hale, noted that in analyzing the best markets for first-time home buyers, Realtor.com looked at the general availability of homes for sale, relative to how many families there were in one market, rather than inventory numbers alone. “In other words, we’re looking at the level of availability and not whether it’s getting better or worse,” she added.
Other promising markets for first-time buyers in 2024
The upstate New York town was followed by Benton, Ark.; Winterset, Iowa; and Newington, Conn., in second, third and fourth places on Realtor.com’s list of best housing markets for first-time buyers.
Affordable housing was a key factor for those cities, as well. Like Irondequoit, home prices in Benton and Winterset — home to several of the “bridges of Madison County” and birthplace of actor John Wayne — were far lower than the national average, at $197,500 and $269,400, respectively.
Smaller real-estate markets are expected to be popular in 2024
While Midwestern markets dominated real-estate lists last year, 2024 looks to be the year of smaller markets as buyers face rising competition as mortgage rates fall.
“While affordability will remain an issue in 2024, a recent Realtor.com survey showed that 95% of prospective first-time homebuyers overwhelmingly feel that they’ll be able to afford a home within their lifetime,” Realtor.com’s Hale said in a statement.
And, if not this year, 40% said they’ll be able to afford it within the next.
Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.