The next best thing. That's what makes up Redfin's list of hottest neighborhoods of 2015. Homebuyers priced out of the urban hipster havens and upscale enclaves on the national real estate brokerage's 2013 and 2014 hot lists are widening their search. But even compromise is costly: The median home price for a next-best Seattle neighborhood is $615,000.
Affordability in areas where house hunters wanted to buy—not job insecurity or low inventory—was cited for the first time since 2012 in a December home-buyer survey by the brokerage. Aside from that gargantuan issue, many things seem to bode well for home buying. You've got low interest rates on mortgages, signs of growth in the labor market, and such changes as the one by Fannie Mae and Freddie Mac to back home mortgages when buyers make a 3% down payment, rather than the previous bar of 5%. But while consumers expect wage growth this year, it's not materializing yet in any broad-based way.
The continued lack of affordable homes is making neighborhoods hottest when they can bridge the gap between affordability and proximity to urban-like amenities (think coffee shops, some walkability), says Redfin chief economist Nela Richardson. In more traditional hot areas, a big question for Richardson is why more potential sellers aren't selling. “The recovery really hasn't come to sellers yet, “ she says. “Maybe we're in this vicious cycle where sellers don't sell because there is nothing to buy and buyers can't buy because people aren't selling.” In that case, market forces may be at a stalemate.
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The Hot List* (go here for the full list covering the five hottest neighborhoods in each of 27 metro areas):
El Cerrito (San Diego) Median home price: $320,000; median days on market: 26
Dickinson Narrows (Philadelphia) Median home price: $192,000; median days on market: 55
East Atlanta (Atlanta) Median home price: $211,000; median days on market: 34
Little Neck (Queens, N.Y.) Median home price: $425,000; median days on market: 73
Bohemia (Long Island, N.Y.) Median home price: $350,000; median days on market: 90
Curtis Park (Sacramento) Median home price: $381,000; median days on market: 26
Andersonville (Chicago) Median home price: $308,000; median days on market: 18
Woodridge (Seattle) Median home price: $615,000; median days on market: 8
Crocker (San Francisco) Median home price: $590,000 ; median days on market: 17
Woodridge (Washington) Median home price: $388,000 ; median days on market: 26
*A neighborhood gets the Redfin hot label based on three things. It has the largest improvement in the number of page views and in the number of people who “favorite” listings, and it has the highest prevalence of Redfin “hot homes”—homes that have a 70% chance or higher of having an accepted offer within two weeks of coming on the market—in each neighborhood.
