Experts surveyed by Zillow predict Austin, Texas will be the hottest housing market in 2021, heating up even faster than the nation’s large coastal markets.
Other markets the experts expect to outperform the nation in home value growth are Phoenix, Nashville, Tampa, Fla., and Denver.
The survey, sponsored by Zillow and conducted quarterly by Pulsenomics, asked a panel of economists, investment strategists and real estate experts about their expectations for 2021 home value growth in 20 large markets.
More than eight out of 10 (84 percent) said Austin values would out-perform the national average, compared with just 9 percent who believe it would fare worse. Phoenix came in second (69 percent); followed by Nashville (67 percent); Tampa (60 percent); and Denver (56 percent). Zillow said pageviews on its for-sale listings in Austin by out-of-town searchers were up 87 percent in November compared with 2019.
“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” Zillow Senior Economist Jeff Tucker said. “These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather. Record-low mortgage rates and the increased demand for living space, coupled with a surge of millennials buying their first homes, will keep the pressure on home prices there for the foreseeable future.”
Austin also was selected last year to be the hottest market. By mid-December the median list price for homes in the Austin metropolitan area was up 23.6 percent year-over-year -- the largest rise among the 50 largest U.S. markets.
“During the pandemic I think a lot of people spending a big portion of their paycheck on rent or mortgage in cities like New York and San Francisco started working from home and suddenly had options,” said Thomas Brown, a Zillow Premier Agent in Austin and CEO of The Agency Texas. “Their dollar goes a lot further in the South, the climate is better, and Austin has a lot to offer -- from the food scene to outdoor activities and live music. Those factors are going to continue drawing people into the Austin market in 2021.”
Meanwhile, Zillow’s experts said expensive coastal cities will fall short of the national average, with 82 percent of survey respondents predicting New York would see sub-par growth in 2021, 77 percent predicting the same for San Francisco, 67 percent predicting Los Angeles also will have sub-par growth.
“While sustained tailwinds are forecasted this year across most of the shifting U.S. housing landscape, certain densely populated markets with high-priced real estate face prevailing headwinds,” Pulsenomics founder Terry Loebs said. “Accordingly, home value appreciation rates within coastal cities such as New York, San Francisco, and Los Angeles are projected to see a downshift from last year's remarkable levels.”