Empire State reigns supreme in the real estate market this year, with another snowy city in upstate New York taking the top spot in the Best Real Estate Markets of 2024 rankings.
To evaluate the best areas for first-time buyers, Realtor.com analyzed the markets based on several factors, including inventory, home prices, expected home price appreciation, “culture and vibrancy” and commute times.
In addition to the affordability of its housing stock, Irondequoit was pushed to the top of the list by the expected appreciation in value of these homes. The average listing price was $187,000 in November, well below the national average price of $382,230.
If a buyer made a 5% down payment on a typical Irondequoit home, the monthly mortgage payment would be less than $1,200 per month.
But good luck finding a house to buy. According to data from Realtor.com, inventory in Irondequoit was so low in December that homes on the market sold in just 27 days, compared to the national average of 61 days.
There were 11.5% fewer homes for sale there in December than a year earlier, according to data from Realtor.com, which examined 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.”
Irondequoit and the greater Rochester area have grown in popularity in recent years due to the affordable prices of homes in the area, O'Connor noted.
The area is also a gateway to the Finger Lakes region, a popular tourist destination with hiking and wine trails, breweries, distilleries and museums.
Irondequoit is located on the bay of the same name and on the southern shore of Lake Ontario.
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Irondequoit has a population of 51,000 and is located just 6 miles from downtown Rochester.
Several notable universities, including the University of Rochester and the Rochester Institute of Technology, are located in Rochester, while further afield in the Finger Lakes region are Cornell University, Ithaca College and other institutions.
Other attractions in Rochester include the Strong National Museum of Play and the Seneca Park Zoo. Additionally, Rochester is home to well-known companies such as Kodak KODK, -0.85% and Xerox Corp XRX, -1.36%.
One of the world's largest semiconductor companies, Micron MU, -0.24% , is building a large semiconductor manufacturing plant in nearby Clay, N.Y., outside Syracuse, and is expected to create nearly 50,000 local jobs and increase demand for housing in the area.
“We actually have a lot to offer,” O’Connor said, despite the “reputation for winter weather.”
However, this meteorological reputation is being questioned. Although Rochester is known for annual snowfall on the order of 100 inches, Rochester only recorded half that, 50.4 inches, in 2022-2023, according to the National Weather Service.
Both Irondequoit and Rochester are notable for their older homes, with the typical home built in the 1920s to 1960s, O'Connor said.
Realtor.com data shows that most people who recently moved to Irondequoit came from New York City, followed by Syracuse and Washington, D.C., based on patterns observed from October to December last year.
“This relatively affordable area is growing in popularity as buyers look for relatively affordable markets in the Northeast,” Hannah Jones, senior economic analyst at Realtor.com, told MarketWatch.
Most people who left Irondequoit moved to nearby Buffalo or to Sarasota or Cape Coral, Florida, Realtor.com data showed.
Low inventories due to the “lock-in effect”
Like much of the rest of the U.S., inventory in Irondequoit and surrounding areas is low because many homeowners who have taken out home loans at extremely low interest rates see little incentive to sell, O'Connor said, while others keep their homes free and clear own .
Even if they decide to sell, it can be difficult because “real estate prices have risen so much,” O'Connor said. According to Realtor.com, home prices in Irondequoit increased 17.7% in December compared to a year ago.
O'Connor's data showed that homes in Irondequoit tended to sell for 20% above their list prices in 2023, compared to over 16% a year ago.
“The dilemma we face,” O’Connor said, is: “Where are you going to go?”
“Real estate prices have not only risen dramatically, [but] There is also very little inventory. Either people decide not to buy or they put it off in the hope that things will change in the future.”
Realtor.com chief economist Danielle Hale noted that when analyzing the best markets for first-time home buyers, Realtor.com looked at the overall availability of homes for sale relative to the number of families in a market, rather than inventory numbers alone. “In other words, we look at the level of availability, not whether it is getting better or worse,” she added.
More promising markets for first-time buyers in 2024
The New York state city was followed by Benton, Arkansas; Winterset, Iowa; and Newington, Connecticut, ranked second, third and fourth on Realtor.com's list of the best real estate markets for first-time buyers.
Affordable housing was also a key factor for these cities. Like Irondequoit, real estate prices in Benton and Winterset — home to several of the “bridges of Madison County” and birthplace of actor John Wayne — were well below the national average at $197,500 and $269,400, respectively.
Smaller real estate markets are expected to be popular in 2024
While Midwest markets dominated the real estate listings last year, 2024 looks to be the year of smaller markets as buyers face increased competition as mortgage rates decline.
“While affordability will remain an issue in 2024, a recent Realtor.com survey showed that 95% of potential first-time home buyers overwhelmingly believe they will be able to afford a home over their lifetime,” said Hale of Realtor.com in a statement.
And if not this year, 40% said they can afford it next year.
Realtor.com is operated by News Corp subsidiary Move Inc. and MarketWatch is a unit of Dow Jones, which is also a News Corp subsidiary. is.