According to the Wall Street Journal/Realtor.com® Emerging Real Estate Markets Index Quarterly Report, the top three promising real estate markets in the country this summer are all in Indiana.

"Indiana's real estate markets offer homebuyers low prices, a strong economy and a good job outlook," said Hannah Jones, economic data analyst for Realtor.com." These markets haven't been as hot as many were during the [COVID-19] pandemic, so now is the time for them to shine. They are seeing high price growth now, but they are starting from a much lower base than other markets."

The index identifies the top markets for buyers and investors from the 300 largest metropolitan areas. The index surveys cities with strong demand for housing based on the number of page views of local listings, the number of homes for sale, property taxes and the median number of days on the market before a home sells. It also considers metropolitan areas with strong economies, lots of good-paying jobs, high quality of life, and desirable amenities such as lots of small businesses and reasonable commute times. (Metropolitan areas include the main city and surrounding towns, suburbs and smaller urban areas).

Today's homebuyers are looking for good value homes across the country. It's not hard to understand. Home prices are down just 0.9 percent from last June's record median listing price, and mortgage rates are approaching 7 percent. Only four of the top 20 emerging markets on the list have home prices above the national median of $445,000, and those markets are cheap alternatives to nearby big cities.

The real estate markets on this list tend to be smaller, less expensive destinations in the Midwest with strong job markets. These lower prices have proven to be a strong draw for out-of-town travelers.

"Buying a home is not feasible for many buyers in many areas, but these markets offer affordable prices and a good quality of life," Jones said.

However, home prices in these markets are rising. In the top 20 emerging markets, home prices have risen an average of 25 percent, and in the 12 months ending June 2023, home prices rose an average of about 8.9 percent. In these emerging real estate markets, there are fewer homes for sale. And those homes that are for sale sell quickly.

What's so special about Indiana?

Four Indiana cities - No. 1 Lafayette, No. 2 Fort Wayne, No. 3 Elkhart and No. 9 South Bend - are all within a few hours' drive of each other. They also have home prices about $90,000 to $160,000 below the national median home price.

The Lafayette metro area topped the list for the second consecutive time, with a median home price of $355,000, about 20 percent below the national median. The city is named after the Marquis de Lafayette, an American Revolutionary War hero.

However, two years ago, homebuyers could buy a small ranch with a single-car garage for as little as $100,000. Now, they'd have to pay at least $200,000 for the same home - if they could accept an offer, said Jennifer O'Shea, a realtor in the northeast part of the Keller Williams Indy metro area.

"The housing market is really tight. The housing market is really tight, and there's not a lot of construction going on," she said." It's crazy. I've never seen anything like it.

Since April, she has written seven offers for one client and still none have been accepted. Her client is competing with local buyers, out-of-town buyers, and investors with cash offers.

The area is a manufacturing center about an hour northwest of Indianapolis and two hours southeast of Chicago. Some of the more recognizable local employers include Caterpillar, Subaru and Purdue University. Purdue University West Lafayette enrolled more than 50,000 students last fall, making it one of the largest universities in the country.

"Two years ago," O'Shea said, "we were a very cheap market, and now we're becoming less cheap.

Top 20 Emerging Real Estate Markets for Summer 2023:

Lafayette, Indiana (median home listing price of $355,000 in June)

Fort Wayne, Indiana ($350,000)

Elkhart, Indiana ($285,000)

Bloomington, IL ($331,000)

Sioux City, Indiana ($342,000)

Columbus, Ohio ($399,000)

Topeka, Kansas ($298,000)

Johnson City, Tennessee ($422,000)

South Bend, Indiana ($292,000)

Kingsport, Tennessee ($342,000)

Manchester, NH ($535,000)

Knoxville, TN ($475,000)

Columbia, MO ($398,000)

La Crosse, Wisconsin ($337,000)

Portland, Michigan ($626,000)

Akron, OH ($226,000)

Oshkosh, WI ($334,000)

Milwaukee, WI ($380,000)

Jefferson City, MO ($267,000)

Norwich, CT ($537,000)