Summer 2022 Wall Street Journal/ Emerging Housing Markets Index

Hidden Oaks - Kipling

July 26, 2022

By: George Ratiu & Joel Berner


The economy and housing markets are moving through a transition toward a new normal this summer. Consumers maintained an active pace of retail spending, even with surging inflation, as a strong labor market maintained upward movement on wages. In addition, after two years of pandemic restrictions, Americans embraced summer vacations with enthusiasm. Encouraged by this spending, companies continued hiring, while still struggling through a significant shortage of employees. At the same time, many professional services companies pushed to bring workers back into offices, just as the cost of gasoline reached new highs and inflation took a bigger bite of salaries and wages.

The pressure of rising prices is a prevailing headwind this year, felt by the majority of people across the country. The Federal Reserve acknowledges the threat that rising prices pose to consumer spending and economic growth, and has been actively engaged in hiking borrowing costs in order to cool consumer demand. After missing early signals in 2021 by calling inflation “transitory,” the central bank has accelerated its monetary tightening, with a 75 basis point increase at its last meeting, and indicated that it will take more aggressive measures in the months ahead, as needed.

The economy continues to also feel the impact of global supply chain disruptions due to the ongoing Russian war in Ukraine. The international community maintains a raft of economic sanctions in response to Russia’s aggression. 

With inflation at a 41-year high, mortgage rates at levels not seen in over a decade, and both home prices and rents at record highs, Americans are feeling rising financial strains this summer, which are reverberating through housing markets. Within a macro environment characterized by increased volatility, real estate fundamentals are shifting away from the overheated conditions of 2021. 

On the demand side, rising mortgage rates pushed the monthly payment for a median-priced home to $2,000 in June 2022 from $1,300 a year ago, leading to a noticeable dropoff. Buyers who may have started looking for a home three or four months ago are finding that by the time they find the right home, their budgets may no longer be enough to buy it.

On the supply side, more homeowners are listing their properties for sale, ready to move forward with pandemic-delayed plans and also take advantage of high prices. With declining competition among buyers, many homes for sale are lingering longer on the market, leading to a growing share of price reductions. In June, the share of homes on seeing price cuts rose to 15% of listings, more than doubling last year’s 7% during the same month.

Summer 2022 Top 20 Emerging Housing Markets

Within a dynamically changing landscape, the summer 2022 index shines a bright light on a noticeable flight to affordability. The top of the list is populated with housing markets displaying solid economic fundamentals, in-demand amenities and lifestyle options, along with a critical dose of affordable homes. The index also identifies markets that we believe are good areas in which to purchase a home for homeowners and investors alike, with expectations of price appreciation complementing vibrant and diverse communities.

We reviewed data for the largest 300 metropolitan areas in the United States. The summer 2022 ranking surfaced the following top areas:

Rank Metro Population Unemployment Rate (%) Median Home Listing Price June 2022
1 Elkhart-Goshen, IN 206161 1.6 279450
2 Burlington, NC 171346 3.6 380150
3 Johnson City, TN 204540 3.1 350000
4 Fort Wayne, IN 416565 2.2 286400
5 Billings, MT 183799 2.4 544000
6 Raleigh, NC 1420376 3 499950
7 Rapid City, SD 144514 2.3 409900
8 North Port-Sarasota-Bradenton, FL 854684 2.6 598500
9 Topeka, KS 230878 2.5 225000
10 Visalia-Porterville, CA 468680 7.7 415995
11 Fort Collins, CO 360428 2.9 627450
12 Durham-Chapel Hill, NC 652542 3 499450
13 Santa Cruz-Watsonville, CA 269925 4.2 1324975
14 Boulder, CO 327171 2.7 866500
15 Huntsville, AL 481681 2.1 409775
16 Vallejo-Fairfield, CA 446935 4.6 616495
17 Eureka-Arcata-Fortuna, CA 134977 2.9 530000
18 Jefferson City, MO 150198 2.4 239900
19 Elizabethtown-Fort Knox, KY 154356 4.1 277000
20 Colorado Springs, CO 753839 3.6 549950

 Affordability and High Quality of Life Lead Summer Housing

All of the top 20 markets in our index fall into one of two categories: affordable or outdoorsy. Twelve of the markets had a median home listing price near or below the national median during the second quarter of 2022, led by Topeka, KS and Jefferson City, MO where the median listing prices were just over $200,000. While many of these markets have flown under the national radar, the secret about their affordable qualities has gotten out, though. The average year-over-year growth rate for the median listing price among these 12 markets is 21.6%, compared to 16.2% nationwide, a sign that buyers are active. On the other end of the spectrum are the 8 markets on the coast or in the mountains like Santa Cruz-Watsonville, CA and Boulder, CO, with median listing prices over $1,300,000 and $850,000 respectively, where low-cost listings are hard to find but opportunities for outdoor recreation are not. 

By definition, all of our top markets are hot markets and price growth is sure to follow. Our featured markets are at different pricing stages, though. In our number 1 market, Elkhart-Goshen, IN, price growth reached a staggering 49.4% in the second quarter of 2022 as the market was the subject of highly-focused demand. Elizabethtown-Fort Knox, KY, on the other hand, just broke into the top 20, and its 3.4% listing price growth rate is the lowest of the markets on our top 20 list for now.

The listings in these markets move fast. The average time on market for the top 20 is 22.6 days, compared to 32.3 nationwide. In fact, all of our featured markets except Eureka-Arcata-Fortuna, CA, see listings spend fewer days on market than the national median. The three North Carolina markets are among the metros with the shortest transaction times. Raleigh, NC (11 days), Burlington, NC (15 days), Durham-Chapel Hill, NC (17 days) have all seen a blistering pace of sales during the second quarter of the year, as buyers chased after the relatively low cost of living in the state. However, the speed at which these listings move is not really a new development, and the year-over-year change in days on market for our featured metros is actually positive, while at a national level days on market decreased by 14.2% from the second quarter of last year.

On a positive note, even with high demand, prospective homebuyers pursuing affordable housing or access to the great outdoors in one of our featured markets are finding the number of options growing. On average, across the top 20 markets in our index, active listing counts were up by 33.2% year-over-year and the number of newly-listed homes was up by 11.1%. The figures highlight a market moving toward more balance, especially compared to the national active listing growth rate of 4.9% and new listing growth rate of 4.0%. Buying a home is still difficult, with listing prices continuing to soar at the same time that mortgage rates are at their highest point since 2008 and the worst inflation since the 1980s makes saving for a down payment even harder. One part of the challenge, though, finding enough available homes in desirable markets, is finally starting to fade.

The good news is that the feverish pace of the 2021 market is behind us, and we are seeing markets move toward more balance, in line with historical trends. However, we don’t have enough homes for all the people who need them, following over a decade of underbuilding.

Mid-sized Cities Lead the Emerging Pack

The list of top emerging markets continues to highlight mid-sized cities this summer. In the wake of dramatic changes brought about by broader responses to the pandemic—which we underlined in our spring and summer 2021 reports—smaller metro areas away from the coasts are shining brightly. The populations of the Top 20 markets averaged about 402,000 in the second quarter, less than the 600,000 in our Spring 2022 list, and also less than half of the average for the 300 markets, which was 915,000. In addition, 9 out of the 20 cities at the top have populations below the 250,000 threshold, including this quarter’s leading metro, Elkhart.

For many young professionals, especially those with growing families, the cost premium of living in a city like San Francisco or New York has lost its allure during the pandemic. With changing stages of life, as well as lifestyles, many professionals are looking for better work-life balance, along with a lower cost of living in places like Durham-Chapel Hill, NC, Fort Collins, CO, or Elizabethtown, KY. In many cases, they are within a reasonable driving distance from larger cities, while enjoying more access to outdoors amenities. Enhancing the appeal of these locations, a large number of companies have expanded their operations into emerging hubs in midsized markets over the past few years. And while the share of people working from home has been shrinking, remote work is expected to remain an integral part of a hybrid employment model.

Growing Local Economies Boost Housing

As we saw in the spring 2022 report, today’s top-ranked housing markets are built on the foundation of a strong local economy. Having a solid employment base is a prerequisite for a healthy housing market, and the Top 20 list highlights metro areas with diversified economies and low unemployment. These metros have a blend of private industries, health care, higher education, along with government agencies and institutions. The strength of local markets is underlined by the 16 out of the top 20 metros which had unemployment rates at or below the national 3.6% rate in the second quarter of 2022. Wages in the top markets were also slightly higher than in the entire group of 300 metro areas analyzed. Enhancing the employment picture, especially in a return-to-work age, average commute times in the top 20 cities were slightly shorter than across all metros in the index.

Growing real estate markets need vibrant employment, along with a nurturing environment for entrepreneurs, seasoned professionals and families. The top emerging markets have, on average, a larger share of small businesses rounding out a diverse panoply of regional, national and international companies. 

In addition, these metro areas are linked along major commerce and transit routes, like I-69 and I-90 which connect the Elkhart and Fort Wayne cities in Indiana, with major hubs in Chicago and Indianapolis. Similarly, most of the other top markets are along interstate highways, offering easy access to national destinations and serving as interlinked transportation hubs along major commercial corridors.

Active and Outdoor Lifestyles are the New Benefit

The spring 2022 report found that many of the quarter’s top emerging markets were desirable vacation destinations, and gateways for outdoors pursuits. While the summer list has a slightly lower vacation profile, the Top 20 cities offer what has become a must-have benefit in the pandemic age, and will likely continue beyond: an active outdoors lifestyle. Most of the top are situated in the Sun Belt, offering a milder climate and more sunny days throughout the year. Whether it’s access to mountains in North Carolina, Tennessee, Colorado or Montana, or beach destinations like California or Florida, top emerging markets provide residents with easy access to the outdoors.

These locations are well-suited for people looking for higher quality-of-life, in any generation. For retiring Baby Boomers looking for an active lifestyle, these cities provide good weather, access to lakes, and other bodies of water, forests and other outdoor destinations, all within a lower cost of living framework. For Gen X and millennials caring for children, many of the top markets benefit from a bevy of family-friendly amenities, including good schools, parks, beaches, mountains, and vacation homes. And for Gen Z—many of whom are still in college or just starting their careers—these locales are home to colleges and universities, along with a large number of employers, as well as lower-priced housing.

City Spotlight: Elkhart-Goshen, IN

Elkhart-Goshen Economy

Our top market for the summer of 2022 is Elkhart-Goshen, IN. East of Chicago and north of Indianapolis, Elkhart county is a community of about 200,000 in northern Indiana, just east of South Bend. Elkhart is a center of industry. A number of manufacturers of RVs and RV components call Elkhart home, including Jayco and Keystone, along with musical instrument producer Conn-Selmer and many other fabrication firms. These manufacturing employers, along with regional healthcare and local service providers, contribute to Elkhart-Goshen boasting one of the lowest unemployment rates among the metros studied for this index: just 1.6%.

In the current climate of rising cost of living and relatively stagnant wages, the appeal of middle-class jobs in a mid-size Midwestern market is clear, and demand for affordable housing in Elkhart-Goshen has been red-hot. The median listing price, though relatively low from a nationwide perspective at under $280,000, has exhibited strong year-over-year growth, even as the number of new and active listings on the market has increased faster than in the US at large. The largest share of home shoppers viewing listings in Elkhart-Goshen come from neighboring South Bend, but only slightly behind are viewers from the Chicago metropolitan area, about 100 miles away. Chicagoans, facing a median listing price of $365,000 and an unemployment rate of 4.2% in their own city, make up 21% of all viewers of Elkhart home listings from outside Elkhart itself.     

Elkhart-Goshen Housing Highlights – Elkhart-Goshen, IN: June 2022 Inventory Metrics
    YoY % Change
Median List Price $ 279,450 17.2%
Active Listings 128 12.3%
Days on Market 19 12.1%
New Listings 188 4.4%

Cross-Market Demand 

Who’s in – Who’s out? And Why?

Returning Markets

There are many familiar places on the list of the top 20 emerging markets: 12 members of the Summer 2022 list, most notably number 1 Elkhart-Goshen, IN and all of the top 9, were also on the Spring list in April. The 3 highest-ranked markets from the first quarter of 2022 fell a few spots but all remained in the top 20. Among the markets that have remained on our list are a few coastal vacation destinations like North Port-Sarasota-Bradenton, FL and Santa Cruz-Watsonville, CA; but most are small- to mid-sized cities in the middle of the country that offer affordable housing and low costs of living.

Market Summer Rank Spring Rank Rank Change
Elkhart-Goshen, IN 1 12 11 spots higher
Burlington, NC 2 14 12 spots higher
Johnson City, TN 3 17 14 spots higher
Fort Wayne, IN 4 13 9 spots higher
Billings, MT 5 9 4 spots higher
Raleigh, NC 6 10 4 spots higher
Rapid City, SD 7 1 6 spots lower
North Port-Sarasota-Bradenton, FL 8 3 5 spots lower
Topeka, KS 9 16 7 spots higher
Fort Collins, CO 11 8 3 spots lower
Santa Cruz-Watsonville, CA 13 2 11 spots lower
Boulder, CO 14 6 8 spots lower


Markets Falling Out of the Top-20:

Of the 8 markets that did not remain on the list from the Spring into the Summer, 6 tumbled a bit but remained in the top 50. However 2 of them, Santa Rosa, CA and Cape Coral-Fort Myers, FL, took hard dives out of the top 20, falling 105 and 69 spots respectively. With the exception of Columbia, MO and Yuma, AZ, the markets that departed the top 20 in our index tend to be more expensive vacation destinations. As economic conditions have changed since earlier in the year, these sunnier and more luxurious markets have fallen out of favor.

Market Summer Rank Spring Rank Rank Change
Santa Rosa, CA 109 4 105 spots lower
Naples-Immokalee-Marco Island, FL 35 5 30 spots lower
Coeur D’Alene, ID 42 7 35 spots lower
Columbia, MO 37 11 26 spots lower
Cape Coral-Fort Myers, FL 84 15 69 spots lower
Yuma, AZ 22 18 4 spots lower
Tampa-St. Petersburg-Clearwater, FL 33 19 14 spots lower
San Jose-Sunnyvale-Santa Clara, CA 28 20 8 spots lower

 New Markets

Taking the places of the 8 descended markets are several smaller California cities, some markets in the south-central US, and Colorado Springs, CO, which puts a third Colorado market into our top 20. Five of the markets crept in from just outside the top 20, but Durham-Chapel Hill, NC, Eureka-Arcata-Fortuna, CA, and Jefferson City, MO made large jumps from outside of the top 70 in the Spring rankings to land in our Summer list. Much like the markets that stayed in the top 20, those that joined it tend to be more affordable and inland. An interesting development in the context of the recent housing landscape is the cooling down of Florida markets. Only 1 remained in the top 20, 3 fell out, and none were added.

Market Summer Rank Spring Rank Rank Change
Visalia-Porterville, CA 10 27 17 spots higher
Durham-Chapel Hill, NC 12 71 59 spots higher
Huntsville, AL 15 23 8 spots higher
Vallejo-Fairfield, CA 16 24 8 spots higher
Eureka-Arcata-Fortuna, CA 17 128 111 spots higher
Jefferson City, MO 18 107 89 spots higher
Elizabethtown-Fort Knox, KY 19 46 27 spots higher
Colorado Springs, CO 20 25 5 spots higher


The ranking evaluates the 300 most populous core-based statistical areas, as measured by the U.S. Census Bureau, and defined by June 2020 delineation standards for eight indicators across two broad categories: real estate market (50%) and economic health & quality of life (50%). Each market is ranked on a scale of 0 to 100 according to the category indicators, and the overall index is based on the weighted sum of these rankings. The real estate market category indicators are: real estate demand (16.6%), based on average unique viewers per property; real estate supply (16.6%), based on median days on market for real estate listings, median listing price trend (16.6%). The economic and quality of life category indicators are: unemployment (6.25%); wages (6.251%); regional price parities (6.25%); the share of foreign born (6.25%); small businesses (6.25%); amenities (6.25%), measured as per capita “everyday splurge” stores in an area; commute (6.25%); and estimated effective real estate taxes (6.25%).