Spring is a prime time when it comes to buying new homes, and it looks like buyers may be paying more than ever this year. For two years, the number of homes on the market has fallen, leaving fewer options for buyers and driving up prices. According to Javier Vivas, director of economic research and author at realtor.com, at least half of all homes for sale this summer will sell for over $300,000, higher than the $275,000 peak in July 2017.

With few homes available below $200,00, buyers in the higher-income brackets will have more to choose from than those in the lower ones. Vilas says that, based on current trends, only one-third of homes for sale this summer will be priced for first-time buyers. Even cold weather markets are exceeding normal expectations when it comes to home sales.

Realtors are optimistic about 2018 for several reasons. In addition to a sellers’ market, interest rates in 2018 still fall slightly below four percent. Realtor.com estimates that 43% of all home sales in the United States this year will be made by millennials. Having already made an impact on lower-end home prices, they are now in a financial position to enter the higher levels of the market.

With a competitive market heating up, metropolitan areas already facing housing shortages top the list of hot markets. Among these, San Francisco heads the list, followed by cities in California and Colorado. Buffalo, New York, rose to the top 20 for only the second time since June 2015, and Boston jumped 14 spots to become one of the hottest markets in the country.

California topped the list with over 11 markets, but eight other states were included: Colorado, Texas, Massachusetts, New Hampshire, Ohio, Idaho, New York, and Michigan. Included in the city ranks are surrounding towns and suburbs.

The 20 hottest real estate markets 2018, as listed by realtor.com, include the following:

1. San Francisco, CA
2. Vallejo, CA
3. Colorado Springs, Co
4. San Jose, CA
5. Midland, TX
6. Santa Cruz, CA
7. Boston, MA
8. Stockton, CA
9. Columbus, OH
10. Sacramento, CA
11. Denver, Co
12. Chico, CA
13. Boise City, ID
14. San Diego, CA
15. Modesto, CA
16. Dallas, TX
17. Fresno, CA
18. Buffalo, NY
19. Santa Rosa, CA
20. Ann Arbor, MI