The housing market is heating up in Sun Belt cities.
Austin is slated to be the country’s hottest housing market in 2021, joining a slew of cities like Nashville, Tampa and Denver that are likely to see spikes in home value growth, a new report by real estate marketplace Zillow suggests.
As many as 84% of economists, investment strategists and real estate experts surveyed by Zillow about the U.S. housing market in 20 of the country’s largest markets said Austin home values would outperform the national average. What’s more, page views on Zillow for-sale listings in Austin by out-of-town searchers surged 87% in November 2020 compared with a year before in pre-pandemic days.
Phoenix came in second, with 69% saying its value would exceed the national average, followed by Nashville with 67%, Tampa with 60% and Denver with 56%. Economists and investors surveyed found that young Americans, particularly millennials, are taking advantage of low mortgage rates in the Sun Belt cities, particularly during the pandemic when work is remote and weather is ideal for living an outdoor lifestyle.
“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” Zillow senior economist Jeff Tucker said in a statement.
“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.”
RENTAL HOME CONSTRUCTION CLIMBS AS PURCHASE PRICES SURGE
The median list price for homes in the Austin area was up 23.6% year-over-year, the largest rise among the 50 largest U.S. markets, according to Zillow.
“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 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,” said Thomas Brown, a Zillow premier agent in Austin and CEO of The Agency Texas. “Those factors are going to continue drawing people into the Austin market in 2021.”
HOME PRICES SURGE BY MOST IN OVER 6 YEARS
Meanwhile, home values for coastal cities are slated to come up short of the national average with 82% of economists and investors surveyed saying New York, in particular, would see underwhelming growth in 2021; 77% saying San Francisco, and 67% naming Los Angeles.