We might not automatically think of the Midwest as the hottest real estate market, mainly when coastal regions have historically dominated this title. However, 2023 looks like it could be a year where this changes.

The prices are likely to remain pervasively high in coastal states through the year, leaving some homebuyers to opt for the Midwest, at least according to one Zillow economist.

The Midwest is a region of the country that remains relatively affordable, and that’s appealing for remote workers who want to buy a home this year, even if mortgage rates stay high.

Remote work has left open a lot more opportunities for people to leave places expensive and high-tax locations.  

The larger cities in the Midwest could benefit from this growing trend, like Chicago, Indianapolis, Cleveland, and Cincinnati. Home prices are more affordable, and it could make ownership a reality for transplants from more expensive areas where they were priced out.

The Zillow Home Price Index recently showed the median home price in Chicago is just over $314,000, which is about $43,000 below the national average.

Over 54% of Chicago homes are sold under listing price, indicating the market is less competitive than places like Boston and San Francisco.

The Zillow economist was careful to point out that talking about hot markets in the Midwest isn’t necessarily the same as talking about the record growth in some regions of the country in 2021. Instead, he said it’s more about the Midwest offering a healthy balance between buyers and sellers, so there’s more activity and churn overall.

In the recently released Wall Street Journal/Realtor.com Emerging Housing Market Index, seven of the ten listed up-and-coming housing markets were smaller cities with strong economies and relatively affordable homes.

Lafayette, Indiana, took the top spot, and it’s about an hour from Indianapolis and two hours from Chicago. Lafayette is also home to Purdue University, and it has a strong manufacturing sector because of employers like Caterpillar and Subaru in the area.

Other top emerging real estate markets on the Index included Fort Wayne and Elkhart, both in Indiana as well asTopeka, Kansas, and Columbia, Missouri.

The relative stability that comes with a healthy balance of buyers and sellers stands in stark contrast to metros elsewhere, which are often erratic when it comes to real estate patterns.

If you are a buyer and you’re considering the Midwest, you will probably not see enormous gains in equity over the next few years. Still, the benefits it might offer you include more attainability to buy a home and a sense of stability. If you’re ready to own a home and don’t see it happening where you currently are because it’s too expensive, then you might consider the Midwest.

Redfin data suggests that more than 24% of homebuyers were looking for homes in metro areas outside of where they currently lived during the third quarter of last year, and that was up from just 19% during the third quarter of 2019.

Buyers in expensive markets like New York City, San Francisco, and Denver were, according to the Redfin data, consistently looking for homes in markets in the Midwest that weren’t as expensive. More than 31% of people searching on Redfin from Denver were considering buying elsewhere, and Chicago was the top search destination out of state.

While the Midwest is less expensive than the East and West coast in general, that doesn’t mean there aren’t expensive enclaves, and there’s a lot of pricing depending on where you are. If you want to buy in Lincoln Park, a high-end Chicago neighborhood, the typical home is around $539,000, whereas a home in Milwaukee might be much lower at around $181,000.

If you have the chance for mobility, it could be a good time to look outside of more expensive markets and maybe consider the Midwest.