For the first time in five years, the suburbs of five major metropolitan areas – Boston, New York, Chicago, Detroit and St. Louis – are represented on the annual Realtor.com® Hottest ZIP Codes Report released today, marking a renewed interest in commutable homes as much of the country’s workforce returns to in-person work.
Americans who have been shopping for a home in 2023, despite limited inventory and high mortgage rates that remain in the 6-7% range, are flocking to areas that are more affordable relative to the rest of the country, less expensive than their nearby metro area, or provide better value, offering more space at a lower price.
Located exclusively in the Midwest and the Northeast, each of this year’s top 10 Hottest ZIP codes in America is attracting buyers with homes that are either priced at or below the U.S. median, or are larger in size than the U.S. average. Additionally, homes listed within the Hottest ZIPs received an average of 3.6 more views per listing than in the rest of the country, and sold one month faster than average in 2023.
The Top 10 2023 Hottest ZIP Codes in America, in ranking order, are:
Other New Jersey Zip Codes making the Top 50 include 08080 – Sewell, and 08520 – Hightstown. “As many companies continue to call employees back to the office, we’re seeing a surge in home shoppers who are seeking a desirable combination of cost and convenience within commuting distance of major metropolitan areas,” said Danielle Hale, chief economist for Realtor.com®. “In addition to affordable markets, this year’s list also features some higher priced areas close to large urban cores, which will likely appeal to buyers who are concerned with finding the right mix of size and amenities within reach of a nearby city center.” Suburban space, closer commutes draw home shoppers Looking more closely at this year’s hottest ZIPs, No. 3 on the list, Ridgewood, N.J. (07450), is a high-priced suburb of New York City that offers an idyllic setting with typical listings that are more than double the size of those in the NYC metro and is just a one-hour commute from Manhattan. Shoppers are willing to pay up for these amenities, and homes in the area have a price-per-square-foot that is 7.9% higher than the metro’s average. Big-city dwellers are driving demand Six of this year’s Hottest ZIP codes – generally those found near big-cities – drew the majority of their property views from within their metro area, suggesting that in many areas, buyers are looking to move around locally. Additionally, those areas seeing significant interest from other locations are typically seeing it come from big-city shoppers. Reflecting this trend, No. 1 ranked Gahanna, Ohio (43230) captured the largest share of out-of-metro viewership among the Midwest metros, drawing 13.1% of its viewership from the New York City area in the second quarter of 2023. In fact, New York City was the top out-of-market viewer for seven of the 10 hottest zips. Nearly all Hottest ZIPs feature more space In seven out of 10 of this year’s Hottest ZIP codes, the typical home is larger than the average home in the surrounding metro area. Among the more expensive locations on the list, the typical household size is also larger, indicating that home shoppers in places such as Ridgewood, N.J. (07450), Andover, Mass. (01810) and Pittsford, N.Y. (14534) may be shopping for more space to accommodate a larger family. This is particularly true in Ridgewood, N.J. (07450), the most expensive ZIP on this year’s list, where the typical household is 19.7% larger than the U.S. average of two-and-a-half people per household. Be prepared and move fast Despite the overall housing market starting to cool, with the average home in the U.S. spending about 45 days on the market, homes in this year’s Hottest ZIP codes spent just 10 to 25 days on the market and saw three times more visitors per property on Realtor.com® in June. With inventory falling 22.4% in these ZIP codes compared to a 7.1% increase nationally, those looking to buy in these markets are facing tough competition. “Shoppers in this year’s Hottest ZIP codes should cope by being prepared – pre-approved and zeroed in on their budget and down payment – and really focused on must haves versus nice-to-haves so they can be ready to act quickly when they see the right home hit the market,” said Realtor.com® Economic Research Analyst Hannah Jones. The high price of financing a home purchase this year and still-steep competition meant successful buyers in the hottest markets also came with exceptional qualifications, with an average credit score of 754, surpassing the U.S. average of 740. Additionally, they made higher than average down payments, reaching 17.2% compared to the national average of 12.3% in the first half of 2023.
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