10 Top Real Estate Markets That Are on the Rise

It's no secret that housing prices have soared during the pandemic. According to the Case-Shiller Home Price Index, the price for the average house in the U.S. is up 34% since March 2020.

While higher mortgage rates are expected to cool off the housing market, a number of metro areas are set to keep gaining in the coming years, especially as Americans reorient themselves around things like remote work and even changing climates.

If you're looking for housing markets that are on the rise, check out the list below.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

Arizona has been welcoming transplants and retirees for generations with its hot and arid desert climate. And Phoenix has seen housing prices boom during the pandemic, attracting Californians, among others, with lower home prices in a nearby area with a similar climate.

Phoenix home prices jumped 32.6% in the year ended in January, making it the fastest-appreciating market in the 20-city index.

Ironically, affordability is one of the main reasons for its surge as Phoenix has attracted millennial remote workers looking to buy their first homes. According to Zillow, the average home price in Phoenix is now $425,000, which is still significantly less than many coastal cities.

ALSO READ: Why Everyone's Making a Big Deal About Housing Inventory

Arguably, no other city is hotter these days than Austin, the home of the South by Southwest festival. Austin has gone from a funky college town to an up-and-coming cultural city with a thriving food scene and growing tech industry.

Tesla has relocated its headquarters from California to Austin, and tech giants like Apple have opened major regional offices, employing thousands in the Texas capital.

Austin was ranked the hottest housing market in the country in 2021 by Yahoo! Finance, with home prices jumping 39%.

The South Florida housing market surged during the pandemic as the combination of warm weather and no income tax attracted New Yorkers and others looking to take advantage of the remote work shift.

There's also a push to make Miami a start-up tech hub, and its mayor has enthusiastically embraced cryptocurrency.

Miami was already expensive before the pandemic, but it had the third-fastest-growing home prices on the Case-Shiller 20-city index in 2021, with 28% growth, showing demand remains strong.

ALSO READ: Why Tampa Is a Homebuyer's Dream

Like other attractive markets for vacations and second homes, Maine's housing prices have jumped sharply during the pandemic as buyers from elsewhere in the Northeast looked to take advantage of remote work and a much cheaper housing market than New York or Boston.

Portland's a small city, but its reputation as a hub for restaurants and breweries and the surrounding coastal scenery have drawn transplants over the last two years, and low inventory has helped push prices higher.

That trend seems set to continue, as Realtor.com predicted that Portland would be the fastest-growing metro in the country this year, forecasting 10% growth.

Though most of the hottest housing markets on the list are found in the Sun Belt and Mountain West, Providence's housing growth shows that secondary markets near big cities are also booming. Providence is just one hour from Boston and three hours from New York City, with much lower home prices than either of those markets.

It's also home to a number of renowned educational institutions, including an Ivy League school (Brown), a top design school (RISD), and the Johnson & Wales culinary school-- which explains why the city has a well-regarded restaurant scene.

According to Realtor.com, Providence is expected to have the second-fastest home price growth this year, at 9.5%.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

The Mountain West has been growing rapidly for a long time as "empty" states like Idaho attract emigrants from places like the Bay Area who are looking for a lower cost of living and great access to the outdoors. Not surprisingly, it was a popular destination for Californians during the pandemic.

Boise fits the bill on both accounts, and the Idaho capital was one of the fastest-growing markets in the U.S., with home prices up 20% in the year up to August 2021.

There are signs that the housing market is peaking there, but a budding tech industry and the surrounding mountain playground should help the city continue growing.

Miami isn't the only hot housing market in Florida. Tampa has also been one of the fastest-growing cities during the pandemic, ranking #2 on the Case-Shiller list, with a 30% gain last year.

Tampa's housing market is especially affordable compared to cities like New York or Miami, with the average home worth just $400,000. Additionally, the city offers a warm climate year-round and easy access to the beach. That and a low cost of living have proven to be a winning formula as the remote work trend makes cities like Tampa more attractive.

Like other Sun Belt cities, Nashville has been a fast-growing market for years, benefiting from an affordable cost of living and a friendly business climate, and it seems set for more gains.

WalletHub recently ranked Nashville one of the top 10 places to buy a house, and in 2022, PriceWaterhouseCoopers ranked it as the housing market with the best overall prospects in the U.S.

Home values are up 81% in the last five years, but the average home is still only around $400,000.

ALSO READ: Demand for Apartments in the Sun Belt Remains Red Hot

While some California metros, like the Bay Area, have seen an exodus during the pandemic, San Diego remains strong. Many acclaim the Southern California city for a high quality of life, beautiful weather year-round, and a more relaxed pace than Los Angeles.

According to the Case-Shiller Index, San Diego home prices rose 27% last year, with the median price of single-family homes now worth more than $1 million. Though there are some concerns about a housing bubble, the city's proximity to L.A. and ideal climate should continue to make it attractive.

Denver has been a hot housing market for a while now, with booming population growth, access to the mountains, and an appealing four-season climate.

Home prices in the market have doubled since 2015, and the average home value is now estimated to be $600,000.

An influx of millennials and those looking to escape more expensive coastal cities should keep prices growing as the market in Colorado's capital is still extraordinarily tight.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

Home price growth will slow down nationally. Twenty percent annual increases are unsustainable as home prices are, ultimately, tied to incomes that haven't increased by as much.

Meanwhile, rising mortgage rates will cool off the market, and they could move even higher as the Federal Reserve is forecasting aggressive rate hikes for the rest of the year.

Still, the shift in the housing market is clear as Americans, in general, are looking to move outside of big expensive cities and toward more affordable markets, many of which are in warm-weather climates like the Sun Belt. Expect the cities on this list to continue to outperform.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Tesla. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.