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2020’s Hottest Housing Markets Will Come From the South, While California Sees a Cooldown

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Austin’s housing market is most expected to outperform the national average, according to a panel of experts surveyed by Zillow

– In a survey of 110 economists and real estate experts conducted by Pulsenomics and Zillow, panelists on average expect U.S. home values to grow by 2.8% in 2020.

– Panelists are most optimistic that Austin, Charlotte, Atlanta and Nashville will outperform the national market.

– Panelists are most pessimistic about the most expensive California markets — San Francisco, San Jose and Los Angeles

Led by Austin, housing markets in the southern half of the U.S. will perform the best in 2020, according to a panel of economists and real estate experts recently surveyed by Zillow®.

The Zillow Home Price Expectations Survey, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks more than 100 economists, investment strategists and real estate experts for their predictions about the U.S. housing market. The Q4 survey also asked panelists to rate their 2020 expectations for home value growth compared to the nation in 25 large markets. 

On average, panelists said they expected U.S. home values to grow by 2.8% in 2020. The share of panelists saying they expected a market to outperform that average was weighed against the share saying they expected it to underperform to create a net score. 

Austin is the most likely to see home value growth above that expected average this year according to the panelists, earning a score of 76. A whopping 83% of respondents said they expect the Austin market to outperform the U.S., with only 7% saying it will underperform. Southern markets Charlotte, Atlanta and Nashville were standouts as well, with scores of 59, 51 and 49, respectively. Charlotte was the only market among the 25 analyzed in which none of the panelists said it would underperform. 

Of the 14 markets with positive scores, 11 come from Texas or elsewhere in the Southeast or Southwest. The exceptions are Denver, Minneapolis and Portland. Seattle was the most polarizing market, with an even 40% of panelists each expecting it to overperform and underperform. 

Of the 10 markets that earned negative scores, meaning more panelists expected them to underperform than overperform, six were in California. A group of expensive markets in the state — San Francisco, San Jose and Los Angeles– are expected to perform the worst. Cincinnati and Sacramento round out the bottom five. 

“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. 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. These features, plus the ability to grow and add housing in the future, are attractive propositions for employers and employees alike.”

Many panelists expect home values in San Jose and San Francisco to continue falling in 2020, and some expect more markets in California to join them. Sixteen panelists out of the 42 that selected at least one metro said home values will fall in Los Angeles, and twelve said the same about San Diego and Riverside. 

U.S. 
Metropolitan 
Area
Share Expecting 
Market to Outperform
National Average
Share Expecting 
Market to Perform 
About the Same as 
National Average
Share Expecting 
Market to 
Underperform 
National Average
Net 
Score
Atlanta63%25%12%+51
Austin83%10%7%+76
Charlotte59%41%0%+59
Cincinnati12%42%46%-33
Columbus21%46%33%-12
Dallas49%36%15%+34
Denver55%23%22%+33
Houston32%46%22%+10
Jacksonville36%40%24%+12
Las Vegas41%24%36%+5
Los Angeles20%25%55%-35
Miami29%34%37%-8
Minneapolis23%58%19%+4
Nashville59%31%10%+49
Oklahoma City18%48%34%-16
Phoenix46%42%12%+34
Portland31%40%29%+2
Riverside21%32%47%-26
Sacramento21%28%52%-31
San Antonio44%44%12%+32
San Diego25%37%39%-14
San Francisco24%12%64%-40
San Jose23%16%61%-38
Seattle40%21%40%0
Tampa38%53%9%+29

About Zillow
Zillow® is transforming how people buy, sell, rent and finance homes by creating seamless real estate transactions for today’s on-demand consumer. Zillow is the leading real estate and rental marketplace and a trusted source for data, inspiration and knowledge among both consumers and real estate professionals. 

Zillow’s proprietary data, technology and industry partnerships put Zillow at nearly every major point of the home shopping experience, helping consumers search for and get into their new home faster. Zillow now offers a fully integrated home shopping experience that includes access to for sale and rental listings, Zillow Offers®, which provides a new, hassle-free way to buy and sell eligible homes directly through Zillow; and Zillow Home Loans, Zillow’s affiliated lender that provides an easy way to receive mortgage pre-approvals and financing. Zillow Premier Agent instantly connects buyers and sellers with its network of real estate professionals to help guide them through the home shopping process. For renters, Zillow’s innovations are streamlining the way people search, tour, apply and pay rent for leased properties. 

About Pulsenomics 
Pulsenomics LLC is an independent research firm that specializes in data analytics, opinion research, new product and index development for institutional clients in the financial and real estate arenas. Pulsenomics also designs and manages expert surveys and consumer polls to identify trends and expectations that are relevant to effective business management and monitoring economic health.

Source : Zillow

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