Doug Ressler, the director of business real-estate intelligence at Yardi Matrix shares five up-and-coming cities he thinks have the greatest home-price growth potential as new residents and jobs flood in — and the 2 riskiest markets. Ressler doesn't think there will be a significant drop in home prices in the near future as housing supply stays low. That's a fairly consensus view, given that the highest mortgage rates in over two decades are disincentivizing current homeowners from moving, leading to relatively few existing homes being listed for sale. But Ressler says some markets are more immune to home price declines than others. In a recent interview with Insider, he listed five cities where prices will likely have a floor under them going forward — and have the biggest chance for growth — thanks to factors like population growth and new industry moving in. He also named two markets most at risk of declines as growth trends work against them.
Cities with Greatest Growth Potential:
1. Dallas-Fort Worth
Ressler highlighted the Dallas-Fort Worth metropolitan area thanks to its high population growth. Between 2021 and 2022, the Dallas-Fort Worth area saw the largest population jump in the US, according to Census data published in May. In that time, the area added more than 170,000 residents. Ressler believes this influx is due in part to Texas' warm climate. Of the 15 cities seeing the biggest population jumps, 14 were either in Texas, Florida, Nevada, California, Arizona, or North Carolina.
2. Austin, Texas
Austin is another beneficiary of a warm climate, Ressler said, as the city saw the largest percentage gain in population (2.7%) in the US between 2021 and 2022. Despite this, home prices in Austin are down 10% on a year-over-year basis, according to Redfin data. Ressler expects prices to stabilize, however, given the ongoing influx. Since 2020, Austin has seen some of the most outsized home-price growth in the county. Higher mortgage rates since early 2022 have taken the froth out of hot markets like this.
4. Cincinnati, Ohio
Cincinnati is another place benefitting from the tech sector, Ressler said. Amazon's air hub was built at the city's airport in 2021.
5. Columbus, Ohio
Columbus is another city in Ohio seeing big growth in tech jobs, Ressler said. Billions of venture capital money has been poured into startups in the city, according to TechCrunch, especially over the last half-decade or so.
Where Home Prices Are Most at Risk of Declines:
1. Boise, Idaho
On the flip side of things, Ressler believes Boise, Idaho is one of the cities at biggest risk of seeing home price declines. This is because it lacks incoming jobs compared to those listed above, and has a less attractive climate than more southern cities.
According to Census data, it was the only major town in the state that saw its population fall in 2022.
2. Minneapolis, Minnesota
Minneapolis, Minnesota fits in this category as well, Ressler said, with its population shrinking over the last few years.
"They're not the migration magnets that the bigger southeast sunbelt cities are," Ressler said of Boise and Minneapolis.
"Minneapolis has been stagnant," he added. "We don't see that changing."