California Drops Out of Top 5 in Realtor.com Hot Markets Index

The nation's hottest markets are increasingly scattered throughout the country instead of dotted along its pricey western edge as more affordable markets move up the ranks, according to realtor.com^®'s list of June's hottest housing markets.

On average, markets in the top 20 hottest markets that have prices lower than realtor.com^®'s national median list price of $299,000 jumped 12 ranking spots year-over-year. At the same time, California ended its historic streak of dominating the hotness list, dropping out of the top five rankings for the first time in six years.

Midland, Texas, took the top spot for the second month in a row, followed by Columbus, Ohio and Boston -- which were both on the list of headquarters contenders announced by Amazon. In the hottest markets, homes continue to sell quickly. Age of inventory in the top 20 markets averaged only 34 days, faster than last June (36 days) with the typical age of inventory registering 40 days or less in each of the top 20 markets.

Amid the most competitive home-buying season in history, buyers are increasingly gravitating toward less-expensive locales. According to realtor.com^®'s June data, eight of the 20 hottest markets featured list prices that fell below June's median list price of $299,000. These markets saw the biggest upward movement on the list, while higher price markets did not see significant upward movement.

"As the record pace of sales continues to challenge would-be home buyers, the hottest market rankings show that buyers are looking for markets that offer relative affordability," said Danielle Hale, chief economist at realtor.com^®. "In the three cities that were on Amazon's list of possible HQ2 contenders - Columbus, Ohio, Boston and Dallas - affordability isn't taking as big a hit as in other hot markets despite properties selling faster than just about everywhere else. This would change if Amazon were to come to town."

In Columbus, prices stayed consistent year-over-year and, at $250,000, still remain below the typical U.S. median. Although Boston is pricey - the typical listing runs $529,000 – prices increased only 6% annually, compared to 9% for the U.S. as a whole. Finally, in Dallas, where listing prices are above the typical U.S. median at $356,000, the change in prices was also more manageable at just a 1% increase from last year.

According to realtor.com^®'s June housing data, the nation's inventory of active home listings decreased 4% on an annual basis, a slower rate than the 8% average decrease in the previous 12 months. Coupled with 547,000 new listings hitting the market in June, a 2% increase year-over-year, there is some relief to tight inventory conditions. But, with a record low of 54 days on market and a record high median listing price, the U.S. housing market will continue to be a challenge for buyers for the foreseeable future.

Realtor.com^® Hotness Index