According to the most recent data from Realtor.com, the median existing home prices went up 2.4% on an annual basis to $418,300 in the second quarter of 2025. The report also noted that the South leads the nation when it comes to housing supply, with more than 50% of both new and existing home listings.
The good news is that there are still affordable markets that have growth potential. If you’re looking to enter the real estate market in 2025, there are undervalued housing markets that are finally getting hot and attracting the attention of both home buyers and investors.
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We will review these markets, including average home prices, population, cost of living (for one person and a family of four), and the factors driving their growing popularity.
1. Oklahoma City, Oklahoma
- Average home price: $205,240
- Average cost of living (one person/family of four): $1,961/$4,651
- Population: 713,207
“Oklahoma City is one of the most underrated housing markets in the country, but that’s starting to change,” said Brett Cobb, a real estate expert and founder of Premier OKC Home Buyers. “In just five years, average home values have jumped from around $155,000 to over $205,000.”
Cobb shared that the city still offers a lower cost of living than most metros of its size in the country.
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What’s driving the growing popularity?
Cobb believes that what seems to be fueling the demand is a strong job market, significant downtown development and families moving from high-cost states looking for space and stability. He shared that he has personally seen investors from both coasts scooping up properties because it’s still affordable, cash-flow friendly and full of opportunity.
2. Des Moines, Iowa
- Average home price: $212,902
- Average cost of living (one person/family of four): $1,834/$4,436
- Population: 218,178
Jacob Naig, a licensed real estate investor, agent and contractor, believes that Des Moines is a major market that’s been hiding in plain sight. He pointed out that the average home price five years ago was roughly $160,000. Even though the housing prices have gone up, they’re still far lower than the national median.
What’s driving the growing popularity?
Naig noted that buyers had been priced out of the market in places like Chicago or Denver, so they’re turning to Des Moines, where they can afford a house and get a lifestyle upgrade. With a lower cost of living and affordable housing options, Naig has seen out-of-state investors circling the market.
The real estate investor also shared that the city has quietly emerged as a magnet for recession-proof industries like insurance, financial services, agritech, and logistics. With the big employers being Principal, Wells Fargo and Nationwide, the market is attracting talent from around the country. Naig also noted that Downtown Des Moines has experienced a cultural renaissance over the past decade with riverfront development, bike trails, food halls, and live-work loft conversions.
3. Ocala, Florida
- Average home price: $272,939
- Average cost of living (one person/family of four): $1,926/$4,294
- Population: 66,634
“Ocala used to be overlooked, but it shouldn’t be,” noted Dani Beit-Or, a real estate expert, investor and CEO at Simply do It. Beit-Or shared that housing prices were around $185,000 just five years ago, but the market still offers affordability compared to nearby metros like Orlando and Tampa.
What’s driving the growing popularity?
Beit-Or pointed out that the market has strong rental demand from retirees, blue-collar workers and seasonal residents. The area is also investing in infrastructure and commercial development, which has attracted both investors and homebuyers.
4. Kansas City, Missouri
- Average home price: $251,923
- Average cost of living (one person/family of four): $2,107/$5,231
- Population: 521,120
“Kansas City hits a sweet spot for me with its low entry prices, strong rental demand and stable cash flow,” remarked Beit-Or. He noted that home prices were around $200,000 five years ago and have slowly gone up over time.
What’s driving the growing popularity?
Beit-Or credits the growing popularity to a solid job base in logistics, tech and healthcare, combined with landlord-friendly laws and a lower cost of living. This combination is helping heat the market up, and it may be the right time to make the move.
5. Hollywood, Florida
- Average home prices: $450,186
- Average cost of living (one person/family of four): $3,053/$6,649
- Population: 156,582
“Hollywood is one of South Florida’s most undervalued housing markets that’s finally getting the attention it deserves,” remarked Maria Elena Plasencia, a licensed realtor and sales director at Fortune International Group. She pointed out how, over the past five years, the average home value has jumped from around $293,000 in 2020 to approximately $450,000.
What’s driving the growing popularity?
“That growth reflects both increased demand and Hollywood’s rising profile as a coastal city with room to grow,” stated Elena Plasencia. She also noted that the cost of living is more manageable than nearby markets like Miami Beach or Fort Lauderdale and that buyers are increasingly drawn to Hollywood’s affordability and lifestyle. It’s also important to note that the city’s downtown district is undergoing major redevelopment, and areas near ArtsPark at Young Circle are becoming more vibrant.
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This article originally appeared on GOBankingRates.com: America’s 5 Most Undervalued Housing Markets That Are Finally Heating Up
