Originally published by REALTOR.com | December 7, 2020
The Realtor.com® economics team put together a list of the housing markets that are expected to sizzle next year.
Wouldn’t it be great to look into the future? You could see just how quickly the world will recover from this deadly pandemic, get the winning lottery numbers—and learn just which real estate markets will be a solid investment.
Unfortunately, we misplaced our crystal ball. But by analyzing data and trends, the Realtor.com® economics team put together a list of the housing markets that are expected to sizzle next year. The nation’s top markets of 2021 are tech hubs with strong job markets, state capitals where buyers can get more square footage for their money, and smaller cities that are affordable alternatives to the larger, coastal metropolises, according to a recent Realtor.com® analysis.
Seven of the metros that cracked the top 10 are either established or burgeoning tech hubs. Half are state capitals, and four are in California, where prices just keep on accelerating.
Now these markets aren’t cheap—not even close. Just one has a median list price lower than the national median of $348,000. But most are still less expensive than San Francisco, New York, and Los Angeles. They’re siphoning off these big-city residents who can now work remotely due to the pandemic and are moving to lower-priced areas where they can afford larger homes. And they don’t have to compromise on big-city amenities—bars, restaurants, and cultural institutions are all accounted for when it’s safe to frequent them again.
These markets are expected to experience higher price growth and more sales than the rest of the country. Median home list prices are anticipated to rise 6.9% in these metropolitan areas, compared with 5.7% nationally. Sales are to increase 13.1% annually versus 7%.
“The housing markets in tech towns are thriving because that industry is doing well,” says Realtor.com Chief Economist Danielle Hale.
However, she adds, “a lot of companies in the [San Francisco] Bay Area have given workers the flexibility to work remotely. … [Many] of the markets on our list are the places that tech workers leaving the Bay Area look to relocate to.”
To come up with the ranking, Hale’s team factored in past sale prices and number of sales; the rate of new construction; and previous and anticipated economic, household, and income growth in the 100 largest metropolitan areas. (Metros include the main city as well as nearby smaller towns and urban areas.)
So which markets will rise to the top next year? Click here to find out!