Searching for America’s hottest housing market in 2021? Look to the capital of the Lone Star State, experts say.
A Zillow survey of experts dubbed Austin the country’s hottest metro this year, after a whopping 84% of those polled predicted that the city would outperform the national average in home value growth. And house hunters are taking notice, with Austin leading the nation in net inflow of homebuyers during the fourth quarter, according to data from Redfin.
It isn’t the first time that the booming Texas city has been on economists’ radar. Zillow’s survey returned Austin as the hottest market last year, and experts proved prescient then, with the median list price of Austin area homes up 23.6% annually — the largest year-over-year increase among the United States’ 50 largest metros.
“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,” said Thomas Brown, a Zillow agent in Austin. “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. Those factors are going to continue drawing people into the Austin market in 2021.”
Indeed, per Redfin, 42.8% of home searches in Austin during 2020’s fourth quarter were from out of town, up from 32.5% in the same quarter one year prior. Austin saw a net inflow of 10,268 homebuyers during 2020’s Q4 according to Redfin’s data, up from 2019 Q4 by a massive 148%. And Austin drew flocks of new residents from as far away as the Bay Area, with Redfin reporting San Francisco as the top origin among Austin buyers.
Austin led a list of relatively affordable Sun Belt metros atop Zillow’s list of markets that experts say are likely to outperform the nation at large in home value growth. Phoenix was second in Zillow’s survey, with 69% of experts believing the Arizona city’s values would outshine the nation’s, followed by Nashville (67%), Tampa (60%) and Denver (56%). All have been less expensive alternatives to pricey gateway cities of late, and all have been at or near the top among markets with the highest home appreciation 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.
“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.”