In 2020, the housing market took a steep downturn in the second quarter as the COVID-19 pandemic caused a steep economic decline. However, the residential real estate market bounced back late last year quicker than any other sector of the U.S. economy. The rapid recovery was driven by rising home prices and low inventories across the nation.
“The consequent rise in home prices have boosted wealth accumulation for homeowners.”
—Lawrence Yun, Chief Economist and Senior Vice President of Research at the National Association of Realtors
Now, economists predict that the housing market should remain strong throughout 2021. As is the case with any year, however, some housing markets will be hotter than others. According to a survey of 113 economists, investment strategists, and real estate experts conducted by Zillow and Pulsenomics LLC, these are predicted to be the top 5 hottest housing markets of 2021:
Top 5 Hottest Housing Markets of 2021:
1. Austin, Texas
With roughly a 0.6-month supply of homes on the market on average in 2021, it’s no surprise Austin, Texas, tops the list. Austin is widely considered one of the best places to live in the entire country, and the booming housing market shows no signs of slowing down any time soon.
Austin is primed to become the biggest boomtown in the U.S., and right now is a perfect storm for extraordinary growth. Austin continues to experience an influx of jobs as major tech companies like Apple, Oracle, and Tesla are setting up operations in the city. In addition to the steady rise in jobs, The University of Texas at Austin continues attracting students from around the globe and producing groundbreaking research.
Expect to see rapid growth and a competitive housing market in the Texas capital for at least the next forty to fifty years.
2. Phoenix, Arizona
The Greater Phoenix area is currently experiencing historically low levels of real estate inventory. According to the Land Advisors Organization, “the home-buying frenzy or the accelerating upward trend in prices” won’t end for the foreseeable future. One of the significant driving forces behind the hyper-competitive housing market is the influx of people from California, Oregon, and Washington looking to capitalize on the city’s relative affordability.
The city is home to warm weather year-round, fantastic freeways, and an incredible art scene. Phoenix also offers some of the best outdoor recreation options in the country. The nation’s 6th most populous city is set to experience tremendous growth as people continue to flock to The Grand Canyon State.
3. Nashville, Tennessee
The growing job market and low unemployment rate in Nashville continue to attract people to the city, which has made the city one of the hottest real estate markets in the country in recent years. Listings spend very little time on the market before being sold, and it is common for listings to receive multiple offers over the asking price.
Nashville, Tennessee, has a lively music scene, family-friendly suburbs, and is home to several major corporate headquarters, including Nissan North America, Dollar General, and iHeartMedia. The city is also a hub for higher education and young professionals, boasting over 20 four-year universities.
According to the Nashville Business Journal, five counties in the Nashville area are projected to grow by over 50% by 2045, so don’t expect the housing market to cool down anytime soon.
4. Tampa, Florida
Located on the west coast of Florida, Tampa offers a unique mix of water recreation and city life that is difficult to replicate almost anywhere else. Tampa residents also enjoy warm weather year-round and fantastic entertainment options.
Population growth in Tampa is driving demand for housing. According to Redfin, “the Tampa housing market is very competitive. Homes in Tampa receive four offers on average and sell in around 15 days.” There is a perfect storm of high demand and low inventory, which is why Tampa earned its place as one of the predicted hottest markets of 2021.
5. Atlanta, Georgia
In the last 20 years, Atlanta has grown by over 2 million people, almost doubling in size. The Atlanta metro area is now home to nearly 6 million people. The housing market is highly competitive. Listings are only on the market for six days on average, and buyers face competitive bidding wars with at least seven to eight offers over the asking price.
Atlanta is lauded by many as a great place to live. The city boasts a low crime rate, great suburbs, and an extensive selection of entertainment options. The cost of living is also relatively low, and the weather is perfect for most of the year.
According to the Atlanta Regional Commission, “Metro Atlanta will add 2.9 million people by 2050, pushing the 21-county region’s population to 8.6 million.” As the population continues to grow, don’t expect the competitive housing market to taper off any time soon.