Buyers Are Back. Are Small Towns Their Best Bets?

Affordable homes for sale are still scarce. And yet a recent Realtor.com survey shows a strong hint of optimism. Four in ten hopeful first-time buyers think 2024 will be their year.

“In a year of expected interest rate drops,” says Architectural Digest, “real estate could come roaring back from its beauty sleep.” Well, that’s one way of describing what hopeful buyers have dealt with! So Realtor.com sought out the top draws for new-to-the-market buyers, and turned up some small-town gems. A peek at this list tells us how to think about a couple of key questions:

What qualities make for very good buys?

What makes a neighborhood likely to keep increasing in value?

Let’s take a look.

Gems, Hiding in Plain Sight

Many hopeful home buyers sat out 2023. Understandably, they’ve been waiting for an easier entry point into the housing market. Some believe 2024 is their year.

Interest rates are high, but expected to ease. Home prices are elevated, but no longer skyrocketing. In fact, over much of the country, we can find pockets of cooling. And the recent rise in pending home sales is a bullish sign for buyers.

For the first time in a long time, optimism is rebounding. So Realtor.com’s 2024 list of top markets for real estate beginners is well timed.

The new survey’s top picks have a small-town theme — and they’re mostly in New York State and the Midwest, with a smattering in the Sun Belt regions. You’ve likely never heard of most of them unless you’re a real estate agent. But all of these picks are near popular cities or well-known landmarks.

In all these towns, homes cost quite a bit less than the national average. Yet they’re situated in housing markets with 6% growth forecasts. That makes these areas potentially great investments. (Forecasts for most of the country show a slight dip in real estate values in 2024.)

Overall Winner: Irondequoit, NY

Rochester suburbs are where it’s at. Take Irondequoit, located just a short dash from Rochester. Here, the median home is just $187K. Values are expected to rise steadily.

Some of these homes have witnessed a century. Many have beautiful, old hardwood floors.

Irondequoit looks over Lake Ontario. A range of lakefront vistas and beaches contribute to this town’s beauty and charm.

Just Outside Buffalo: Cheektowaga, NY

Cheektowaga is another upstate New York treasure. A suburb of Buffalo, it offers first-time buyers a variety of homes in the $200K range.

Natural beauty abounds in the Buffalo area. So many scenic parks to enjoy! And the gorgeous Niagara Falls State Park is just a half-hour trip for a Cheektowaga resident.

Homes are remarkably affordable in Cheektowaga. Just $180K can buy a three- or four-bedroom home. It’s a town built by working people, known for a sense of community.

Location, Location, Location: Mattydale, NY

And…upstate New York wins yet again. In Mattydale, a typical home costs only a third of the $410K that’s now typical nationwide, Realtor.com says. This tiny town just outside of Syracuse could be perfect for those who love the Finger Lakes region of New York.

With fewer than 3,000 households, it’s so small that it’s considered a hamlet on the outskirts of Syracuse.That means a good job scene with quick commutes.

Interstate Route 90 passes through this little village. There are several pizza shops and diner-style eateries, including a casual Thai restaurant. Who knew?

Within Reach: Newington, CT

Cultural attractions and desirable homes? Both are available in and around Newington, Connecticut. It’s just outside Hartford, and it’s more affordable than you might think. The median list price is just under $300K.

It’s an old-established suburb of Hartford, yet Newington stands on its own, with its restaurants and cafés. And it’s known to visitors for the annual Waterfall Festival in Market Square.

With more people free to work outside the cities, Newington — near Hartford and a straight shot north from New York City — offers a good starting point for aspiring homeowners.

Up and Coming: Riviera Beach, MD

Just 15 miles southeast of Baltimore, the Chesapeake Bay town of Stoney Beach includes a little neighborhood called Riviera Beach. This little neighborhood has more young adult homeowners than any other town on the list.

Refreshingly, Riviera Beach has plenty of modest homes in the $300-350K range. Once a resort town for the Baltimore-area workforce, Riviera Beach is now attracting a new generation of residents who are bringing the town to life.

Between Little Rock and Hot Springs: Benton, AR

Benton, near Little Rock, Arkansas, has many desirable homes at the ~$200K price point. The town has a weekend farmers’ market and plenty of outdoor sites of remarkable beauty. The motto of Arkansas is, after all, The Natural State.

Hot Springs is near enough for an easy weekend trip. Kayaking, mountain biking, hiking, an aquatic park and casino… Plenty of distinguished old B&Bs… Hot Springs is a destination friends and relatives love to visit.

Omaha Suburb: Council Bluffs, IA

Council Bluffs, Iowa, overlooks the Missouri River and Omaha, Nebraska.

There’s a bus to Omaha, and Council Bluffs could be considered an extension of that great commercial and cultural hub. Those who commute to Omaha have an easy ride across the river. State taxes may be somewhat higher, but many cost-of-living items will be cheaper. People living in Iowa pay lower vehicle registration fees, and avoid the Omaha wheel tax.

And now, the best news for home seekers: This popular town offers listings in the $200K range.

Famous Bridges: Winterset, IA

A typical listing in Winterset runs between $250K and $300K — at a discount, considering U.S. real estate prices in general. This Des Moines suburb is proud of its Dutch heritage and traditional town square. Famous for its six covered bridges — yes, the Bridges of Madison County — it’s an iconic small midwestern town that first-time buyers can comfortably settle into.

Thought Iowa was all plains, no mountains? Think again. Madison County is home to the beautiful Pammel Park, with its scenic streams and mountains, and well-maintained campgrounds perfect for weekend getaways.

Want to visit and learn more? Check out the Pella Tulip Festival in the first week of May 2024.

Pretty Grand: Grand Rapids, MI

Grand Rapids may not be on your list of small towns, but it’s got that small-town feel, with home prices to match. Realtor.com shows listings available for $220-280K.

In fact, plenty of charming homes turn up in that modest range. But what neighborhood would be the best place to start a search? The Realtor.com® mapping tool can assist.

This Michigan city has a great downtown, with well-known breweries and no shortage of restaurants, cafés, and places to enjoy the arts. The network of walking and cycling trails and many other amenities make it fertile ground for young households putting down roots.

Resilience and Renewal: Moore, OK

Moore, just outside Oklahoma City, has various homes for sale in the $200-300K range. Buyers are showing up.

Twenty years ago, this town was picking up the pieces left by a lethal tornado. Some young adults in the town are old enough to remember when the elementary school was hit, and seven youngsters died. The tornado of May 20, 2013 killed two dozen residents and flattened hundreds of homes.

Over the past decade, Moore has built safeguards into its infrastructure. Amenities include a new athletic club called The Station at Central Park, as well as walking trails and parks. Moore is a community in renewal, a community where people look out for each other.

So, There Is Hope…

All of these towns are attracting new generations of buyers, Realtor.com® reports. For many, though, mortgage rates are still making loans too pricey. Some interest rate cuts would help.

If you’re hoping to buy, but price or the disruption of moving present barriers, then focusing on condos and townhouses could be the way to go. Most anywhere you look, the condo units come with a lighter price tag than the single-unit homes. In expensive cities like Delray Beach, Reno, and Galveston, choosing a condo means buying at 50%+ off. That’s a discount worth looking at.

We wish all hopeful sellers and buyers well. Here’s to more people moving…into an easier year than the last one.

Supporting References

Rachel Davies for Architectural Digest via ArchitecturalDigest.com: Five Real Estate Trends That Will Rule the Market in 2024 (Jan. 5, 2024).

Cheryl Reid-Simons for RealEstateNews.com: Small Town USA – Best for First Time Buyers? (Jan. 11, 2024; citing Danielle Hale, chief economist at Realtor.com).

Meera Pal for Realtor.com®: The 10 Very Best Cities for First-Time Homebuyers in 2024 (Jan. 11, 2024).

Scott Stump for Today.com (part of NBC Universal): Moore, Oklahoma a Year After Deadly Tornado: We’re Resilient, But Won’t Ever Forget (May 20, 2014; describing Matt Lauer’s interview with Mayor Glenn Lewis).

Evan Wyloge for Realtor.com®: Condo? Can Do! Here’s Where Townhomes and Condos Will Deliver the Biggest Discounts for First-Time Homebuyers (Jan. 2, 2024).

And as linked.