Overlooked ‘Gem City’ is a hot housing market, with $239K median prices. Here’s the affordability catch to watch for

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Hartford, Connecticut may be America’s No. 1 hottest housing market per Realtor.com’s latest rankings, but there’s a lot of heart for the up-and-comer in second place: Erie, Pennsylvania (1).

In just 12 months, Erie has climbed 12 spots to hold steady at No. 2 since May.

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Realtor.com doesn’t calculate hotness based on good looks, even if Erie is known as “Gem City” and “Gem of the Great Lakes” thanks to its sparkling harbor (2).

The real estate platform ranks markets based on the average number of views local properties get on Realtor.com, how many days they take to sell and relative inventory (2).

On average, in June, Erie properties attracted 3.3 times as many viewers as the national average and sold in 29 days compared to the national average of 53 days.

The tight housing supply is another indicator of a strong market. There are just two months of inventory, making it a seller’s market.

“The hotness in Erie is largely fueled by significant inventory scarcity,” says Realtor.com senior economist Hannah Jones (3).

So how did a city that gets so much Lake-effect snow — an average 104 inches every winter — get so hot (4)?

Up-and-comer is an affordable lakefront community

In fact, the cooler climate is one of the draws. The risk management platform Augurisk suggests that Erie is climate resilient in the long term, with average summer temperatures expected to rise no more than 2.2 degrees over the next century (5).

A more immediate appeal is the city’s waterfront, complete with bars, restaurant patios and ready access to water sports, recreational boating and fishing (6).

Pennsylvania’s only port city is centrally located, just two hours’ drive from Cleveland, Pittsburgh and Buffalo, with jobs in insurance, healthcare and education. There are universities to choose from and a graduate medical college.

One of the biggest upsides to Erie is its affordability, with homes listed for a median $239,000, $200,000 less than the national median. Among the 20 “hottest” cities, only Binghamton, New York — with homes selling for a median $227,000 — is less expensive.

“Affordability makes Erie so attractive to buyers,” Fred Amendola (7), an agent with Keller Williams Flagship Realty, told Realtor.com (8). “Some folks from the area may not think so, but those coming back from other areas or moving here see the difference.”

The catch to cheap homes

The catch to buying a cheap home in this up-and-comer city is that it’s likely a fixer-upper.

According to the City of Erie’s five-year plan released last year, the city’s housing stock is old (9). Nearly 90% of the homes are at least 50 years old, and half were built prior to 1950.

The city’s report suggests that older homeowners have struggled to keep up with maintenance, choosing to pay for “food, medicine and other daily expenses over the cost to keep up an older home.” First-time homeowners and renters on limited income face the same challenge.

Another catch? Property taxes are relatively high in Erie, according to Ownwell, a company that helps homeowners appeal their property tax bills (10). They report that the median property tax rate in Erie is 3.95% — 1.2% more than the state median and 2.93% higher than the national median.

But the overall cost of living is low in Erie, running 10% below the national average and 9% below the state average thanks to relatively low food, housing and healthcare costs (11). Only transportation is more expensive than the average.

So if low-cost lakefront living appeals to you, this gem of a city may be a great place to land.

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