Zillow expects high buyer demand during remainder of 2021 and 2022 for these 12 markets. Inventory shortages to continue driving price hikes while further limiting affordability.
Continued Price Appreciation To Be Spurred by Low Mortgage Rates, Low Inventory and Favorable Demographics
Housing experts are expecting more of the same…high purchase demand, low interest rates and favorable demographics as more and more younger Millennials and older Gen-Zers reach home buying age.
According to Zillow’s Chief Economist Jeff Tucker, comparing a housing market’s current housing inventory to historical norms is a good indicator of market conditions. Zucker said, “…the best predictor of upcoming price appreciation is the most recent few months of price appreciation. There’s momentum intrinsic to that time series that’s much more predictable than other prices, like the stock market for instance.”
Zillow used a model that combines historic price levels, current market values and supply conditions to forecast y/y home price growth by May 2022. Here are the 12 markets Zillow expects to keep booming:
Forecast Home Price Change by May 2022: 21.8%
Riverside is considered to be the “benchmark city” of California’s Inland Empire. Remote workers are coming from San Diego, Orange and Los Angeles Counties to take advantage of Riverside’s relative affordability. Plus, the city is just 45 minutes from some of the world’s best beaches. With inventory lagging behind supply, being a seller in Riverside is advantageous.
Las Vegas NV
Forecast Home Price Change by May 2022: 23.3%
Despite buying and renting in Las Vegas being highly competitive (20 offers on properties within the first two days on the market is not unusual), out-of-state buyers and renters are flocking to the state due to its lower cost of living and lack of state income tax. Lenders do not see such high demand and high price appreciation changing any time soon.
Forecast Home Price Change by May 2022: 23.2%
Boise’s housing market has been hot for so long, it’s hard to remember when it wasn’t. Tech people commute to Silicon Valley from Vegas; finance people commute to Los Angeles; aerospace and biotech people commute to San Diego. n top of these “commuters,” factor in the retirees and young families from everywhere who are coming for the weather, low crime rate and being able to afford golfing and skiing.
Salt Lake City UT
Forecast Home Price Change by May 2022: 23.5%
Like Boise, there is no break in out-of-state demand, nor in Salt Lake City’s escalating home prices. And, because inventory is so tight, local experts believe “…we can’t build our way out of it right now.”
Forecast Home Price Change by May 2022: 24.2%
Spokane is blessed weather-wise and geographically…four seasons plus lakes every 20 minutes. It’s an hour to Seattle, an hour to Boise and an hour and a half to Los Angeles. Plus, this small town has all the conveniences one would want out of a city including great restaurants and great shopping.
San Jose CA
Forecast Home Price Change by May 2022: 24.5%
Is it possible for San Jose to become even more expensive than it already is? Zillow experts say yes. Cash buyers make up over 20% of the market as one of every 797 people in San Jose has a net worth over $30M. Being the high-tech capital of the world, having perfect temperatures 12 months a year and being close to Santa Cruz, Carmel, Monterey, Napa Valley, San Francisco and Sausalito don’t hurt…yes, it is possible for San Jose to become more expensive.
San Diego CA
Forecast Home Price Change by May 2022: 24.7%
High home prices in San Diego are considered by many to be the “weather tax” residents have to pay for having 65 to 75 degree temperatures 330 days a year. Biotech employment is booming, family living is desirable, colleges keep people coming and entertainment/activities keep people engaged. According to some, people come and stay in San Diego “…by any means necessary.”
Forecast Home Price Change by May 2022: 25.2%
Ogden used to be one of the best kept secrets in the US…not any more. Despite there being a major inventory problem, Ogden is a bit more affordable than Salt Lake City while the environment, weather and employment opportunities are just as rich.
Forecast Home Price Change by May 2022: 26.2%
Buyer demand is very real in Phoenix and its environs. It’s relatively affordable despite price wars, the cost of living is relatively low and the economy/job growth opportunities are booming.
Forecast Home Price Change by May 2022: 28.2%
As part of the Utah triumferate with Ogden and Salt Lake City pulling in tech and remote workers from everywhere, Provo has the highest childbirth rate of everywhere else in the country as Millennials are the largest demographic coming to town. Then, along with Millennials moving to Provo, their grandparents are moving in to be close to their grandkids.
Fort Myers FL
Forecast Home Price Change by May 2022: 28.2%
Affordability is the name of the game in Fort Myers. After the affordability draw come the Florida Gulf Coast and the university.
Forecast Home Price Change by May 2022: 37.1%
Look again at that home price forecast for May 2022. Sort of astounding, especially since Austin and Austin’s surging home prices have been on everyones’ lips for a couple of years now. The fact that Austin is the State Capitol, the home of the University of Texas, and the home of South by Southwest, Austin is also one of the country’s premier tech hubs. And, let’s not forget, Texas is a state without state income tax.
Thanks to Zillow and National Mortgage News.