These are the five hottest – and three coldest – markets for home prices in 2021
“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. Their dollar goes further in the South, the climate is better, and Austin has a lot to offer,” said Thomas Brown, a Zillow agent in Austin quoted in the survey.
As for the next-hottest housing markets, Phoenix came in second, with 69% of those surveyed saying it would outperform the national average, followed by Nashville, with 67%, Tampa, with 60%, and Denver, with 56%.
“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” said Zillow senior economist Jeff Tucker. “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.”
While these markets are expected to see the strongest value gains, other former hot spots have fallen far out of favor.
The three markets most likely to underperform, according to Zillow’s survey, are:
- New York
- San Francisco
- Los Angeles
The panelists who participated in the survey do expect these markets to see some growth given the overall housing demand nationwide.
Home price gains nationally have been accelerating in the last several months. They are up over 8% in November, according to CoreLogic. That is the fastest pace in more than six years. Prices are being driven by high demand and short supply, and, more recently, by an improved economic outlook driven by progress on Covid vaccinations.
It is not all smooth sailing, however.