The Next Urban Powerhouses: 10 Smaller Cities Poised to Skyrocket
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Everyone obsesses over the handful of smaller cities that got the secret formula just right and have exploded into some of the nation's biggest economic and trendsetting powerhouses.
It can happen quicker than expected. It wasn't long ago that red-hot (and ultraexpensive) cities such as Seattle, Nashville, TN, and Austin, TX, were considered sleepy or secondary markets. Ah, memories.
When cities reach the exclusive and ever-elusive boomtown status, they find themselves bursting with good-paying jobs, world-class culture, and Instagram-worthy foodie havens. Homeowners who got into these magical markets early can sell their homes for megaprofits. But those trying to buy into them postboom might find the entry price too steep.
So savvy home buyers wonder where the next generation of powerhouse cities will be. That's where the data team at realtor.com® comes in.
We crunched the numbers to figure out which small and midsize metros are poised to hit it big. What we found: unexpected places that are millennial-friendly with tech job growth and proximity to bigger cities where prices have gone insane.
“We'll see small cities continue to be growth centers,” says Chris Porter, chief demographer at John Burns Real Estate Consulting, a national firm. “A lot of them are in the South—a region with great affordability, a business-friendly environment, and warmer weather."
We looked at data* from the 200 largest metros, factoring in population, income, home price, and building permit growth; employment figures; and cultural amenities. We excluded the 15 largest metros to keep big-name cities such as New York and Dallas off our list. And we included only one metro per state to ensure geographic diversity.
Herbert Caen, who penned a column for the San Francisco Chronicle for nearly 60 years, wrote of his beloved hometown: "A city is not gauged by its length and width, but by the broadness of its vision and the height of its dreams."
So where are the next dream towns?
Median home list price (from realtor.com): $309,050
Salisbury, the largest metro on Maryland's Eastern Shore, is in the midst of a growth spurt with no end in sight. Buyers from more expensive locales along the East Coast are moving in for the more affordable homes, reduced taxes, and lower cost of living. And they're creating plenty of job opportunities along the way.
The population here has more than doubled over the past five years—and that's led to a slew of new businesses opening up in this city about a 2.5-hour drive from Washington, DC.
There's also stuff to do here, with a dynamic craft beer scene that's drawing visitors and future residents to the metro, says Morgan Coulson, marketing director for the Salisbury Area Chamber of Commerce. The region now has nearly two dozen breweries.
Home prices in the Salisbury metro are still a bit higher than the national median of $289,900. But compared with what buyers are paying in Washington, DC—a median $449,950—Salisbury is a relative bargain. And there are plenty of abodes for sale for less than $100,000.
The area's housing stock is mostly single-family homes, some dating to the late 19th century, as well as newer construction going up in the suburbs.
Median home list price: $210,050
Recently, there's been a spike in new jobs here, many in the tech sector—about 60,000 in the past five years alone. That's an impressive feat for a city, about two hours west of New Orleans, best known for its Cajun cuisine.
Unusual for this area, Lafayette has a plethora of recently built homes. While new home construction languished nationally from 2010 to 2013, after the financial crisis, Lafayette was putting up new places at more than double the national average pace—and it's only accelerated from there.
The attractions of this city, which rose out of the fabled Atchafalaya Swamp, the largest in the country, aren’t limited to king cake, zydeco music, and crawfish. (Although, seriously, try the crawfish.) It was named the happiest city in the U.S. by the National Bureau of Economic Research in 2014.
“Everybody likes to think the quality of life in their town is unique,” says Jim Bourgeois, executive director for business development at One Acadiana, formerly known as the Lafayette Chamber of Commerce. “But this is a place that has a cultural identity that few others can claim."
Median home listing price: $239,050
The driving force behind Myrtle Beach's growth isn't tomorrow's generation of workers. Instead, more and more, it's yesterday's—retirees on the prowl for great golf courses, 200-plus sunny days a year, and, of course, sea and sand. The city was voted one of USA Today's “Best East Coast Beaches.”
Affordable homes and an abundance of shopping and outdoor recreational opportunities have made Myrtle Beach a magnet for 150,000 new residents during the past five years. (It is important to note that the area does have higher crime rates than the national average.)
The Myrtle Beach metro area “has the advantage of having generally less expensive housing than Florida and is less crowded," says Wendell Cox, a St. Louis–based demographer. "Over the past decade, some of the migration that would have been expected to flow to Florida has gone instead to the Carolinas, and Myrtle Beach has prospered.”
4. Gulfport, MS
Median home list price: $192,550
For more than a century after the Civil War, Gulfport was a quiet place, best known for gargantuan military installations, antebellum homes, and a relaxed vibe. That began changing in the 1990s with the introduction of legalized gambling in Mississippi and the sprouting of more than a half-dozen huge casinos in the region. And then Hurricane Katrina leveled the region in 2005, damaging or destroying nearly 10,000 homes in Gulfport alone.
But where many on the Gulf Coast saw only devastation, others regarded it as opportunity to build a better city. The rebuilding effort added thousands of jobs. And a combination of Southern hospitality and affordable housing has fueled population grown in the Gulfport-Biloxi area.
Scars from Katrina are still evident, but so are the fruits of the recovery effort: new roads and bridges, rebuilt casinos, strengthened harbors, and restored barrier islands. Roughly 50,000 housing units were planned to be rebuilt on Mississippi's Gulf Coast, promised former Gov. Haley Barbour. They included about 70 historic buildings in Gulfport, according to the Washington Post.
Median home list price: $205,040
The longtime capital of the textile and tobacco industries, Winston-Salem has undergone a massive transformation over the past generation. Factories and mills have shuttered or relocated, but plenty of big companies took up the slack, including Krispy Kreme and Branch Banking and Trust Co., both of which are headquartered here. And there's an ever-growing array of startups too.
"The cost of living being lower than other metros, along with the great mix of historic and new homes, makes Winston-Salem a great place to live and raise a family,” says Mark Owens. He recently moved to the area from Greer, SC, to take over as head of the Winston-Salem Chamber of Commerce.
It’s also an educational hub, home to Wake Forest University, Salem College (the oldest continuously operating school for women), and Winston-Salem State University (one of the oldest black universities). And the area is blessed with an abundance of affordable food for the culinarily curious. Residents can load up on anything from pho to baleadas con carne to some of the best fried chicken on the planet.
Housing is also still affordable in the area. Buyers who don't mind rolling up their sleeves and doing some work can score a home for well under $50,000—including a three-bedroom, one-bathroom fixer-upper for $19,900 and a two-bedroom, one-bathroom, single-family abode for $30,900.
Median home list price: $288,950
Furniture manufacturing remains an economic staple in Grand Rapids. But like other successful cities in the Upper Midwest, the second-largest metro in Michigan has diversified. Its Medical Mile is a hotbed of clinical, research, and educational activity. And, like others on this list, this city boasts a flourishing craft beer scene, clearly an essential component in incipient urban hotness. In fact, this place tops USA Today’s Best Beer Scene rankings for 2018.
The lifestyle in Grand Rapids is a pleasant surprise for most newcomers. Forbes ranked it the best city to raise a family, based on income, cost of living, and housing affordability. Outside Magazine gave it the No. 1 “River Town” nod last year, and Travel + Leisure called it the fifth most underrated city in the United States.
So it's not exactly surprising that median home list prices rose 15.6% year over year as of April 1, according to realtor.com data.
Grand Rapids "has large-city amenities with the friendliness of a small town," says Julie Reitberg, chief executive of the Greater Regional Alliance of Realtors in Grand Rapids.
Median home list price: $268,250
Looking for a gig? Consider moving to Knoxville. The area's job growth over the next decade is projected to be an eye-popping 38%, according to Sperling's Best Places.
That may be due to Knoxville's location at the center of an interstate network that leads to most major cities in the Southeast. Atlanta is roughly 200 miles away; Charlotte, NC, an emerging tech and finance center, is about 230 miles away; and Nashville, TN, is about 180 miles away.
That growth is extending to its housing market. Median home list prices jumped 9.9% year over year as of April. 1, according to the most recent realtor.com data. However, there are still plenty of deals to be found for folks who don't mind putting in some elbow grease to fix up their future abodes.
Another perk is the Great Smoky Mountains National Park—the most visited national park—which is less than an hour’s drive east.
Median home list price: $279,050
Tourism has been the biggest economic driver in Daytona, best known for its vast (and drivable!) beaches. But the area, which is home to NASCAR, is diversifying rapidly. While much of Florida suffered through a tepid economic recovery in the wake of the 2008 downturn, the Milken Institute cited the area as the most improved local economy in 2016.
Over the past five years, it’s grown faster than any other major metro in the state, boosted by a low cost of living, affordable housing, and ocean breezes that make the Florida summers bearable.
And while it's not quite the frenetic spring break mecca it once was (Palm Beach has taken that mantle, much to its residents' chagrin), Daytona is still a prime Central Florida resort destination.
As for living spaces, the city has an above-average concentration of large apartment complexes and condominiums. A beachfront condo with ocean breezes doesn't sound too shabby!
9. Ogden, UT
Median home list price: $359,950
Ogden's secret to success is likely its proximity to Salt Lake City, just 40 miles away. However, families on a budget will appreciate that the median home list price is about 11.1% less. (The median home list price in Salt Lake City was $399,950.)
The number of high-paying jobs is also rising here. While its major employers remain the federal government and health care industry, development officials have worked hard to lure smaller high-tech firms to the city. That helped it to land on the Brookings Institution’s list of the Best Cities for Advanced Industries for 2015.
The family-friendly atmosphere permeates Ogden. On any given winter weekend, families load up skis and snowboards and head for one of the world-famous ski resorts in the Wasatch Range, including Alta and Park City. And despite having one of the highest numbers of Mormon residents, who don't drink coffee, the number of places where you can get a caffeine fix has increased by double digits in recent years as more folks move in.
10. Worcester, MA
Median home list price: $299,950
Boston isn't the only city in these parts that's a destination for the young and ambitious. The same can be said of Worcester, the second-biggest city in the state, which boasts more than 10 local universities—as well as housing prices about half of those for Beantown (about an hour away). This old city is growing fast, with an expansion in the local biotech and medical industries and a big downtown revitalization, including a gaggle of hot new restaurants and shops.
"The market in Worcester and the surrounding towns is so hot right now," says local real estate agent Nick McNeil of Keller Williams Realty, "they're making it a place where people really want to come and spend time and live."
The real estate within the city limits is a mix of new apartments and condos and older, single-family homes built in the late 19th and early 20th centuries.
But a note to newcomers: Worcester (pronounced Woo-stah) residents who use the term “Wormtown” to describe their Central Massachusetts home aren’t putting it down. It’s a tip of the hat to the city’s famous underground music scene. Honest.
By: Realtor.com Team
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* Data sources: Housing price appreciation from realtor.com; five-year population trends, income growth, number of building permits from the U.S. Census Bureau; economic statistics from the U.S. Bureau of Labor Statistics; number of cultural amenities from Yelp, Google, and the Census Bureau.