Homebuyers Find Exceptional Value in the Heart of America

November 1, 2022

For the past two and a half years, homebuyers’ needs and wants have been in a continuous state of flux. In tune with these changes, the national real estate market has adjusted to suit new consumer needs. People fled cities in 2020 in search of more spacious homes with closer proximity to their families. In turn, this drove up demand and prices in the nation’s suburbs and rural regions.

Some buyers have returned to cities and the national housing market is cooling after months of record high prices and low inventory. Many prospective buyers have taken advantage of continued remote work practices to live where they want, not necessarily where they work.

As a result, many buyers who wish to maintain a slower pace of life, be closer to family, have access to outdoor amenities, or who have been priced out of coastal markets are turning inward and looking to buy in the heart of America. Why? Along with lower prices and a slower pace of life, the Heart of America is home to global companies, burgeoning arts and culinary scenes, and beautiful real estate.

Engel & Völkers broke down the appeal of eight of the American Heartland’s hottest markets.


Northwest Arkansas

Northwest Arkansas is made up of five metro areas located in Benton and Washington Counties: Bella Vista, Bentonville, Fayetteville, Rogers, and Springdale. It has one of the fastest-growing economies in the U.S., largely due to the three Fortune 500 companies that call the area home—including Walmart. Additionally, numerous other businesses and start-ups are eager to build their teams and infrastructure in a comparatively low-cost market.

The region has been ranked nationally several times over as one of the best places for both living and doing business, coming in at #4 on U.S. News & World Report’s 2021-2022 list of “Best Places to Live.” Along with population and economic growth, home prices have increased 20.4% year over year since 2021 and 54.8% since 2020 to reach $500,000 this year.

The region has also experienced an influx of remote workers relocating from California, Colorado, and Texas. These transplants are drawn to the area’s equally compelling economic and lifestyle opportunities, the natural beauty of the Ozark Mountains, world-class museums, a legitimate food and beer scene, and Bentonville’s distinction as the mountain biking capital of the world.


Little Rock

In addition to Little Rock proper, this region of Central Arkansas also includes the communities of Cabot, Conway, Benton, Bryant, Jacksonville, Maumelle, and North Little Rock/Sherwood. As in other areas of the country, prices have increased with high buyer demand and low inventory across all price points. However, Little Rock remains comparatively affordable. According to the MLS, home prices were up 17.6% year over year in June 2022, with a median price of $255,000, while the median price of homes sold in the U.S. in 2022 is $428,700. Real estate here is appreciating in value and does not experience the extreme ups and downs that may impact markets in other areas of the country, appealing to both current residents and out-of-state investors.

As in other heartland markets, Little Rock draws buyers from larger, more expensive cities looking for a lower cost of living and easier access to outdoor amenities such as parks, rivers, lakes, golf, tennis, and biking. Luxury buyers are especially attracted to the area’s easy access to air travel and short flights to major cities to accommodate remote work and regular business travel.


Des Moines

Des Moines’ housing market was experiencing significant growth even before the housing boom that gripped the nation in 2020. This growth has continued, with the median home price increasing 7.3% year over year to reach $188,026 in September 2022. The city is also ranked the 14th best place to live in 2022-2023 by U.S. News and World Report, based on factors such as affordability, quality of life, and job opportunities. As with other heartland markets, Des Moines is offering a refuge for coastal buyers at a fraction of the cost, with the opportunity for significant growth in the coming years.

3.1% of homebuyers in Des Moines last year moved to the area from out of state, largely from Chicago and the coasts. Des Moines has become an enclave for entrepreneurial startups as well as established corporate employers, attracting new residents for growing employment opportunities.


Kansas City

Despite a 102% appreciation in home values over the last decade, home prices in Kansas City remain below the national median home price. This growth has been bolstered by major local employers like Amazon, Meta, and Hallmark. Inventory is varied, offering buyers everything from small lofts located in the heart of downtown to large homes on multiple acres further outside of the city.

Kansas City has experienced an influx of millennials coming from the coasts as well as major midwest metro areas. These buyers are drawn to the city’s many amenities, including public parks, outdoor gardens, hiking trails, museums, professional sports culture, breweries, and barbecues at a lower cost of living. These offerings have cultivated a metro area that is made up of equal parts of history, innovation, and creativity—spawning a community of many small, local, and independent businesses and artists.


Omaha

Another market on the rise, Omaha has seen its median home prices rise nearly $100,000 since 2016. Omaha has a homeownership rate of 58.3%, ranking above the national average, and it’s one of the top 30 places to live according to U.S. News and World Report’s 2022-2023 ranking.

As the home to five Fortune 500 companies and a budding number of technology startups, Omaha continues to attract both global and domestic residents, largely coming from the West Coast, Illinois, and Texas. The unemployment rate is comparatively low, at only 2.1% as of May 2022.10

At the same time, Omaha remains an attractive location for raising a family, offering not only abundant job opportunities but also housing affordability, a low crime rate, and highly ranked schools, amidst a thriving farm-to-table restaurant scene and many local breweries.


Oklahoma City

A growing cosmopolitan center with a burgeoning food scene, strong economy, and highly rated schools is making Oklahoma City an increasingly desirable market that has experienced 48.25% price growth since 2018. While inventory may be low, rising interest rates have cooled some buyers, and a dollar will still buy residents a lot more “house” when compared to the national market. Home values are also increasing, with the median home price up 14.6% year-over-year to reach $267,000 in June 2022, according to MLS data.

Migrating buyers from the coast are looking for multimillion-dollar homes from which to run their businesses amidst easy, spacious living. Many remote workers are also moving back to the area or coming for the first time to settle in a safe, affordable, and family-friendly market.

Luxury buyers have their pick of home and lifestyle here, with the market offering everything from ranches and lake view properties to luxury golf club communities and downtown historic gems.


St. Louis

Over the past two years, the St. Louis housing market has experienced dramatic price increases amidst extremely low inventory levels. However, currently, St. Louis County is on the upswing for home values and inventory, as is St. Charles County at a slightly lower price point.

St. Louis tends to draw its luxury buyers from other parts of the Midwest, in large part due to the area’s steady job market and employment opportunities in the services, financial, and medical sectors, as well as old-line manufacturers like Anheuser Busch. It remains one of the most affordable luxury markets in the U.S. while offering the benefits of accessible higher education and medical centers, as well as significant resources invested in public spaces such as museums, parks, riverways, and camping. It is an aging market, with nearly 20% of the population aged over the age of 65, indicating a potential shift in the market as wealth transitions.


Tulsa

Like many other areas of the country, over the past two years, home prices in Tulsa have risen at a faster and higher pace than ever before and market absorption rates have shrunk to record lows. However, while the market remains strong, it is beginning to level off as buyer demand dips but prices remain stable.

Buyers in Tulsa remain largely in-town, moving between neighborhoods; however, the market is seeing a notable increase in buyers coming from Colorado, California, and Texas. They are drawn to the low cost of living and affordable nature of Tulsa’s housing market, combined with a rapidly expanding offering of lifestyle activities. These include a burgeoning arts district, nationally recognized parks, the largest concentration of man-made lakes in the country, Southern Hills Country Club, vibrant restaurants and nightlife, and high-end retail at Utica Square, Brookside, and Cherry Street. 


Looking for more insight into these emerging luxury real estate homebuyers? Click here to flip through Engel & Völkers Trend Report: In the Heart of America.

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