Where will the hottest housing markets be in 2020? Go south
The hottest housing markets in 2020 will be the ones where the weather is hotter too.
New data from Zillow suggests that southern markets are expected to outperform other national markets this year.
More specifically, Austin, Texas will stand out the most, according to a new survey from Zillow.
In fact, 83% of respondents said they expect the Austin market to outperform nationally, and only 7% said they think it will underperform.
“Having subjected buyers to a crucible of fierce competition for multiple years, many West Coast markets hit an affordability ceiling that set off declining home values in the most expensive of these,” said Skylar Olsen, Zillow’s director of economic research. “Indeed, this price correction – a clap back from having appreciated with too much exuberance in the recent past – pushes many previously hot markets to the bottom of our experts’ list.”
In a panel comprised of economists and real estate experts conducted by Pulsenomics and Zillow, the average respondent expects U.S. home values to grow by 2.8% this year.
Those who participated said they expect Austin, Texas, Charlotte, Atlanta and Nashville to be the most successful markets.
In fact, of the 14 markets the experts expect to perform strongly in 2020, 11 come from Texas or elsewhere in the Southeast or Southwest. The exceptions are Denver, Minneapolis and Portland.
On the other hand, San Francisco, San Jose and Los Angeles are expected to underperform. These expensive California markets already have a poor track record for affordable housing and cost of living expenses. Cincinnati and Sacramento are the other bottom two.
Many of the panelists said they expect home values in San Jose and San Francisco to keep falling in 2020, as well as other California markets. In San Fransisco, only 8.4% of homes sold in Q3 2019 were affordable to families earning the area’s median income of $133,800
“At the top of the list are metros still providing relative affordability and thriving, amenity-rich communities that appeal to younger adults willing to make a move,” Olsen said. “These features, plus the ability to grow and add housing in the future, are attractive propositions for employers and employees alike.”