Surprisingly, the most competitive housing market in the United States is emerging in the struggling northeastern cities, where folks have faced displacement for the last several decades, as revealed in a recent report.
Hartford, Connecticut, is making a remarkable comeback, with residents actively vying for the surprisingly affordable homes on the market. This insight comes from Zillow’s 2026 Hottest Housing Markets Report.
As of October 2025, the average home price in Hartford was around $382,000.
Interestingly, two-thirds of the homes in Hartford sold for above their asking prices, and there was a significant 63% drop in available homes compared to before the pandemic, heightening demand.
In 2025, only 16.5% of properties in Hartford saw a decline in value, while home values increased by 4.3%. Predictions indicate a further rise of about 3.9% in 2026.
This trend isn’t isolated to Hartford. Other cities are also thriving, where the demand for housing far surpasses what’s available. Buffalo, New York, ranks as the second most sought-after market, with average home prices around $277,000 and 65% of transactions concluding above asking price.
New York City itself isn’t far behind, with nearly half of homes sold for more than the asking price in 2025, averaging about $704,000 per sale. Only 13.5% of properties experienced price drops, and a 1.5% increase is expected for home prices in 2026.
While states like Texas, Florida, and the Carolinas enjoy rapid population growth paired with increased housing development, many areas in the Northeast particularly suffer from a severe housing shortage.
It’s worth noting that the housing inventory in these cities remains drastically lower than in the pre-pandemic era. In Hartford, there are 63% fewer homes available, and in New York, the numbers have roughly halved compared to five years back.
This might come as a surprise, considering Hartford’s historical reputation as a wealthy city—at one point, it was regarded as the richest city in America, largely due to its booming insurance sector. Yet, the latter half of the 20th century brought challenges for Connecticut’s capital.
The population peaked around 1950, with current numbers at 122,000, significantly reduced from 75 years ago. Major insurance firms like Travelers, Aetna, and Cigna have relocated to New York City, which is quite a shift.
Among the top 10 hottest housing markets, three cities are situated in the Northeast, with others representing California, the South, and the Midwest.
Here’s a breakdown of the top 10 competitive housing markets:
1. Hartford, Connecticut
- Average home price: $381,760
- 66% of homes sold above asking price in 2025
- 63% fewer homes available than before the pandemic
- Only 16.5% of properties saw price declines
- Projected home value increase of 4.3% in 2025
- 3.9% increase expected in 2026
2. Buffalo, New York
- Average home price: $277,499
- 65% sold for more than asking price in 2025
- 39.1% fewer homes available than before the pandemic
- Only 17% saw price reductions
- 3.7% projected increase in home values for 2025
- 2.5% expected rise in 2026
3. New York, New York
- Average home price: $704,284
- 49% of homes sold above asking price in 2025
- 48% fewer homes than before the pandemic
- Only 13.5% of listings were discounted
- 2.9% increase in home prices forecasted for 2025
- 1.5% growth anticipated in 2026
4. Providence, Rhode Island
- Average home price: $503,409
- 50% sold for more than asking price by 2025
- 55% reduction in available homes compared to pre-pandemic
- 20% of listings had price reductions
- 2.5% increase in home values expected for 2025
- 3% projected rise in 2026
5. San Jose, California
- Average home price: $1.56 million
- 62% of homes sold above asking price in 2025
- 27% fewer homes for sale than before the pandemic
- Only 17% of listings were discounted
- 2.1% decline anticipated in home prices for 2025
- 1.2% increase predicted in 2026
6. Philadelphia, Pennsylvania
- Average home price: $378,054
- 41% sold for more than asking price in 2025
- 39% reduction in housing inventory compared to pre-pandemic
- 22% of listings were discounted
- 3% projected increase in home values for 2025
- 1.7% expected rise in 2026
7. Boston, Massachusetts
- Average home price: $717,711
- 51% sold for more than asking price in 2025
- 30% fewer homes available than before the pandemic
- 19% of listings saw price reductions
- 1.2% increase in home values projected for 2025
- 1.5% anticipated rise in 2026
8. Los Angeles, California
- Average home price: $941,869
- 42% sold for more than asking price in 2025
- 18.5% drop in available homes compared to pre-pandemic
- 21% of listings saw price cuts
- 1.2% decline forecasted for home prices in 2025
- 1.1% expected increase for 2026
9. Richmond, Virginia
- Average home price: $383,275
- 40.5% sold for above asking price in 2025
- 34% fewer homes for sale compared to pre-pandemic
- 24% of listings were discounted
- 1.3% projected increase in home values in 2025
- 2.1% anticipated rise in 2026
10. Milwaukee, Wisconsin
- Average home price: $369,303
- 50% to sell above asking price by 2025
- 26% fewer homes available than before the pandemic
- Only 17% of listings saw price reductions
- 3.7% increase in home values expected in 2025
- 2.1% projected rise in 2026
