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For the second year in a row, the Texas city of Austin is expected to be the nation’s hottest housing market in 2021, leading a list of mostly Sun Belt cities expected to continue heating up faster than the nation’s large coastal markets, according to a new Zillow survey of experts.
The Texas destination heads a lineup of sunny and relatively affordable metro areas that are most likely to outperform the nation in home-value growth, according to a panel of economists and real-estate experts.
The Zillow Home-Price Expectations Survey, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks a large panel of economists, investment strategists and real-estate experts for their predictions about the U.S. housing market.
An overwhelming 84 percent of those surveyed said Austin values would out-perform the national average, compared to just 9 percent who believe it would fare worse, a ratio of +75. Phoenix came in second with +69, followed by Nashville (+67), Tampa (+60), and Denver (+56). The top-five metros are all affordable options compared to expensive coastal areas that have led home-appreciation ranks in recent years.
“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.”
Among locales that were at the bottom of the ranking: New York City, San Francisco, Los Angeles, Philadelphia, Minneapolis and Seattle, all communities hit hard by the pandemic and government lockowns, and/or by civil unrest.
An improved economic outlook thanks to COVID-19 vaccine roll-outs and better treatments was pegged by experts as the most likely tailwind for the housing market in 2021, followed by sustained strength in first-time home-buying among Millennials.
Austin also was predicted to be the hottest market in last year’s survey, and that proved true. 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.