Hottest Housing Markets in America
Real estate prices went up in 2020, and prices are still rising. The typical home value of homes in the United States is $269,039. Thanks to low interest rates, the average home price rose 22.2 percent compared to 2019, and existing home sales reached their highest level since 2006, according to the National Association of Realtors.
That's insane. It is a good time to be a homeowner, but not a great time to be a homebuyer. Especially in some markets. These cities, as predicted by a Zillow survey of 113 experts, will be the hottest housing markets of 2021.
That means higher prices, bidding wars and a slim inventory to choose from. It's a seller's world here. If you already own property in any of these 15 metro areas, then you're going to have an easy time offloading your pad. If you're a buyer, these are going to be some of the hardest places to buy a home.
15. Minneapolis, Minnesota
Note: The market value score comes from a Zillow survey of experts and is calculated between the share of experts who believe that the city's market will outperform the national average, the share who expect the market to perform about the same as the national average, and the share who believe it will underperform the national average. Scores range from -100 to 100.
Typical home value (from Zillow): $308,108
Market value score: -22
Bottom Line: Minneapolis
Good news for Minneapolis. A report from the Minneapolis Area Realtors found that the city's real estate market had higher sales, strong price growth and very low supply levels.
Why? One theory is that Minneapolis' decision to end single-family zoning, which should have increased supply levels, instead spurred interest in traditional, single-family homes.
However, it's still possible that the new zoning laws, which were enacted in 2019, might make homes cheaper. Of the 113 experts that Zillow surveyed, 20 percent of them believe that the housing market in Minneapolis will outperform the national average, while 42 percent think it will underperform.
14. Seattle, Washington
Typical home value: $813,154
Market value score: -16
Bottom Line: Seattle
While only 29 percent of Zillow's experts believe the housing market in Seattle will outperform the national average, the city's local agents are optimistic.
Biz Journals reported that houses in the Puget Sound region were selling for over their listing price thanks to low inventory.
In the summer of 2020, a Wallet Hub study found Seattle as having the best real estate market in the country out of all large cities in the U.S.
13. Las Vegas, Nevada
Typical home value: $310,128
Market value score: -6
Bottom Line: Las Vegas
The Las Vegas real estate market was expected to crater after the whole city shut down in March 2020.
Weirdly, the opposite happened. Houses sold incredibly fast despite the city's high unemployment rate (15 percent in November 2020, during the hot real estate market), and prices increased 11 percent year over year.
"It makes no sense," Berkshire Hathaway HomeServices agent Christina Cova-Simmons told Las Vegas Review-Journal, adding, "I think about this daily."
An article by the Las Vegas Review-Journal says analysts predict that Las Vegas' real estate market will continue to stay strong into 2021, although prices may not rise as high as they did in 2020.
12. Houston, Texas
Population: 2.31 million
Typical home value: $204,810
Market value score: -2.9
Bottom Line: Houston, Texas
Houston's housing market gained $42 billion in 2020, the largest total increase in value of all metro areas in Texas for 2020.
By November 2020, a construction activity report found that Houston had the third-largest building market in the nation.
Local real estate professionals remain positive about Houston's real estate market, and 32 percent of experts surveyed by Zillow believe Houston's market will beat the national average.
11. San Diego, California
Population: 1.41 million
Typical home value: $689,361
Market value score: -2.8
Bottom Line: San Diego
San Diego's home prices were the third-fastest rising in the nation in 2020.
There doesn't seem to be any indication that the market will weaken, thanks to low supply and low interest rates. CoreLogic reported that the single-family home will increase by 8.3 percent in 2021, compared to a predicted total national increase of around 2.5 percent.
As for Zillow's experts surveyed, 31 percent think San Diego will beat the market's national average.
10. Miami, Florida
Typical home value: $389,138
Market value score: 1
Bottom Line: Miami
Single-family home inventory in Miami hit a record 15-year low as of early 2021, fueling a hot real estate market and an equally hot luxury market, where pricey condos are now popular due to the lack of single-family inventory.
Total home sales reached $4.3 billion in November 2020 across the Miami metro area, and local experts are predicting that the upswing will continue into 2021.
9. Riverside County, California
Typical home value: $474,150
Market value score: 7
Bottom Line: Riverside
Los Angeles residents being priced out of the market are expected to filter off to the surrounding areas, like Riverside, which is expected to fuel higher home prices. In fact, prices in Riverside are expected to climb a whopping 10.6 percent in 2021 (they were up 9.6 percent year-over-year in 2020).
Thirty-seven percent of experts surveyed by Zillow believed that Riverside's market would increase more than the national average, compared to the 31 percent who felt it would underperform in comparison.
8. Washington, D.C.
Typical home value: $672,601
Market value score: 13
Bottom Line: Washington, D.C.
No matter who's in charge, Washington, D.C., seems to have a stable housing market. The luxury market in the capital city is especially hot because there are so few luxury homes available.
Only 83 properties sold for more than $3 million in 2019 because of such limited inventory. Between 2019 and 2020, there was, overall, a 25 percent increase in sales activity in the region, with seemingly every sale going into a bidding war.
Zillow's experts are relatively optimistic as well, with 37 percent saying the city's market will beat the national average.
7. Atlanta, Georgia
Typical home value: $311,092
Market value score: 38
Bottom Line: Atlanta
There was a sharp drop in supply in the Atlanta real estate market in 2020, with 37 percent fewer units available year-over-year, according to Norada.
Sales prices increased nearly 17 percent, and the majority of Zillow experts surveyed believe the market will be red-hot in 2021. It's also getting difficult to find an affordable apartment in the city.
A total of 57 percent of those experts believe Atlanta's market will beat the national average, while 24 percent think it will stay about the same and 19 percent think it will underperform.
6. Dallas-Fort Worth, Texas
Typical home value: $273,348
Market value score: 39
Bottom Line: Dallas-Fort Worth
The Dallas-Fort Worth real estate market is worth $625 billion and is the most valuable market in Texas,
Houses in the FFW area have been selling extremely fast and often at prices higher than the initial listing. There are just too many people who want houses in the area, and not enough to supply them. To put this in perspective: There were 750,000 homes for sale in 2020. In 2021, there are 400,000 homes for sale, a 46 percent drop in inventory.
The majority of Zillow experts surveyed, 54 percent, believe that the DFW market will outperform the national average.
5. Denver, Colorado
Typical home value: $498,911
Market value score: 44
Bottom Line: Denver
Denver's real estate market has been going strong for a decade, and that trend is predicted to continue in 2021. Annual appreciation is running at 18.7 percent, and more million-dollar homes are being sold than in 2020 (about 70 percent more). There's also a lot less inventory to choose from.
While Zillow has the typical home in Denver being worth $498,911, the Denver Metro Association of Realtors found that number to be significantly higher at $629,000. In 2020, it was $530,000, a jump of $100,000 in one year.
"It’s almost like the market is drunk," Chad Nash, senior real estate adviser with Compass, told The Denver Channel.
As for the Zillow experts, 56 percent of experts think Denver will outperform the national average.
4. Tampa, Florida
Typical home value: $281,097
Market value score: 54
Bottom Line: Tampa
Tampa-area homes are flying off the market, with the average home staying on the market for just 10 days in December. Through the year, one report predicts that home prices in the area will increase by 7.5 percent this year.
In 2019, Zillow predicted that Tampa Bay home prices peaked. Now, it has the Tampa area as being the fourth-hottest housing market in the country, with 60 percent of experts surveyed believing it will outperform the national average and only 6 percent of those surveyed believing it will underperform.
3. Nashville, Tennessee
Typical home value: $316,078
Market value score: 55
Bottom Line: Nahsville
Nothing has slowed down the real estate market in Nashville. Home prices are predicted to increase by 8 percent as millennials enter the market in droves, and inventory remains low, very low.
In July 2020, inventory dropped to the lowest it has been in five years. The people who want to live in Nashville have to elbow their way into a crowded real estate market while the people who live there are staying put.
As for the experts, 67 percent of those surveyed by Zillow believe Nashville's market will outperform the national average.
2. Phoenix, Arizona
Typical home value: $310,514
Market value score: 60
Bottom Line: Phoenix
Inventory in Phoenix has dropped sharply since 2020.
"Last three or four months that I've seen in 30 years, beyond nothing you could ever prepare for. It's lunacy," Bobby Lieb, an associate broker with HomeSmart Real Estate, told Fox 10 Phoenix. "It just kind of creates the hype, and all of a sudden what we're seeing, the inventory was at a pretty good rate back in April or May and June [in 2020]. Now it's the lowest it's ever been as far as inventory goes."
A ton of people are moving to Phoenix, which is decimating the inventory rate. According to Fox 10, 80,000 people moved to Phoenix in the last year.
As for the experts, 69 percent believe Phoenix's market will outperform the national average.
1. Austin, Texas
Typical home value: $454,896
Market value score: 76
Bottom Line: Austin, Texas
Despite the massive freeze, Austin is still looking to be the hottest housing market in the entire country in 2021. Housing supply in Austin is severely limited, driving prices up. The devastating storm that hit Texas in February caused massive business disruptions and untold amounts of property damages.
Yet no one is predicting that the Texas real estate boom will weaken any time soon. Homes will need to be reinspected, and houses will need to be fixed, which will delay closing times and pause the housing market rush. But when things are fixed, the demand is expected to still be there.
Before the storm, one agent reported that a single house in Austin received 100 offers. An Austin real estate agent told Biz Journals that some people were looking for houses as soon as the storm had passed.
And a whopping 84 percent of the experts that Zillow surveyed believe Austin's market will outperform the national average.