Bloomington-Normal, Illinois, stands out as HousingWire‘s the hottest market of 2026 and currently sits at 0.4 months of inventory. The median list price in the metro area is $355,000, up 16.4% from last year.
Despite more than one-third of listings showing price reductions, demand remains strong enough to support brisk sales and upward pressure on prices.
“We need more housing in Bloomington,” Patty Hadley of the RE/MAX Selection he told HousingWire. “Our local government has started several programs that will help to achieve that, and we are very happy about it.
“Houses are moving very quickly. I had a house on the market for two months, which is unusual, but it was between Thanksgiving and Christmas, and that’s always slow. It’s a really exciting time here and in central Illinois, in general.”
Midwest and college towns dominate
The Midwest features prominently among the hottest markets — Illinois and Ohio each claim multiple locations.
Lawrence, Kansas; Sandusky, Ohio; Kankakee-Bradley, Illinois; Mansfield, Ohio; and Bay City, Michigan, all ranked near the top due to strong availability and consistent buyer interest.
College towns also seem to play a big role.
Bloomington-Normal; Lawrence; and Ithaca, New York, benefit from stable employment bases and consistent university-related housing demand, as broader market conditions fluctuate.
“I sell everything from Peoria to El Paso down to all of central Illinois, not just Bloomington,” Hadley said. “Common is strong. Like I said, we don’t have enough housing in Bloomington, so we end up with a lot of people being evicted within 30 miles of the area.”
“Bloomington also keeps a lot of people here because we have a lot of industries – there are State Farmwe have Rivian, Carle Healthmany things that keep people in our city. I can see what makes our market stand out.”
Hot markets, cooling prices
Several markets show that greater competition does not always translate into higher prices.
Great Falls, Montana, saw median list prices drop nearly 8% year-over-year, while Ithaca posted a 7.4% decline. Carson City, Nevada, and Lawrence also saw lower rates.
At the same time, price drops are becoming more common.
In Sandusky, Carson City and Bay City, nearly half of all listings involve downsizing. This suggests that sellers are testing the market – and adjusting quickly when buyers reject higher price points.
The big metros are still kicking
Among major markets with at least 1,000 homes for sale, competition is less intense but still favors sellers.
Richmond, Virginia, and Spokane, Washington, stand out, with median list prices of $450,000 and $475,000 respectively.
In California, San Francisco-Oakland-Fremont remains competitive despite a median price approaching $1 million – indicating a stable but not overly soft market.
Midwestern municipalities including Cincinnati, St. Louis, Columbus and Cleveland also rank among the hottest major markets, reinforcing the region’s relative affordability and growing appeal.
The early housing structure of 2026 is explained less by runaway price growth and more by the continuing housing shortage.
The geographic diversity is amazing — from small college towns to large coastal metros — but the common thread is limited supply.
