Rising energy prices are driving home sales and price growth in America’s oil boomtowns, according to a report Realtor.com released Thursday.
Texas and parts of the Midwest dominated the listing site’s monthly hottest housing markets index, as affordable areas in the country’s center overtook the pricier coastal cities in terms of price growth and the speed in which homes are changing hands. The shift to the Midwest underscores the severity of the housing shortage in some areas, where developers have built very little besides high-end homes since the Great Recession.
Midland, a city in west Texas near the oil-rich Permian Basin, ranked No. 1 on the hotness list. The average listing has been on the market for less than a month, while listing prices have soared over the past year.
The median home on the market is now selling for $350,000, significantly greater than the national median listing price of around $300,000, according to Realtor.
The number of million-dollar listings is helping drive the price growth there. There were 34 homes on the market priced over $1 million in the Midland area as of Thursday, according to Realtor.com.
“Driven by a surging oil economy, the median age of inventory in Midland is 29 days, with homes receiving 2.4 times more listing views than the U.S. overall,” said to the site’s report.
Neighboring city Odessa, another Texas boomtown, has also experienced rapid price growth of 45% over the past year, with the median list price at more than $289,000 in July. Realtor ranked Odessa No. 20 on the nationwide list, and there are now more than a dozen homes in the city asking more than $1 million.
Other formerly depressed areas of the country, particularly in the Midwest Rust Belt, have watched prices soar over the past year as more homebuyers are entering markets where there’s been very little new home building since the housing bust of 2008-09.
Fort Wayne, Indiana, and Boise, Idaho, ranked as the second and third hottest markets in the U.S. in July, respectively, according to Realtor.
The median listing price in Boise has soared 17% past the national average to $339,000.
The situation in Boise highlights the severity of America’s affordable housing shortage. A recent study by the U.S. Department of Housing and Urban Development, found there are 10 times more buyers looking for a home in Boise than available homes for sale. Median days on market was down to only 34 days.
Much of the growth in listing prices has been due to higher-end development, which is out of sink with budgets.
“With the median home list price hovering at a record level, affordable markets are very attractive for buyers, which is contributing to the popularity of many Midwestern markets,” said Danielle Hale, chief economist at Realtor.com, in a statement. “Inventory remains scarce due to strong buyer demand and years of underbuilding.”