In news that likely won’t surprise anyone, experts say Austin is set to be the hottest real estate market in the country in 2021 – again.
According to the Zillow Home Price Expectations Survey for the fourth quarter of 2020, real estate experts, economists and investment strategists say Austin will significantly outperform the national real estate market. The report, produced by independent research firm Pulsenomics, contains predictions of home value growth in the top 20 US markets in 2021.
While the report cites Austin housing availability and questionable affordability as “potential drawbacks,” experts point to “improved economic prospects supported by advances in coronavirus vaccines” as a key component of housing growth in the Austin market.
Experts had previously predicted that the Austin real estate market would be the hottest in 2020. By mid-December, when the median list price for homes in the Austin metropolitan area was up more than 23 percent year-over-year – the biggest increase among the 50 largest U.S. markets – it was clear that the capital would outperform all other major markets in 2020 , so the report.
Austin residential real estate growth is a number of factors including the seemingly immense exodus of tech companies and workers from the west coast to central Texas. That guess is supported by the Zillow report, which puts San Francisco and Los Angeles at the bottom of the list of 20 cities next to New York City in terms of projected housing growth this year.
Even the New York Times recently noticed the massive influx of San Franciscans tech geeks moving to central Texas. They claimed Austin was their # 1 location for moves of growth in the local tech industry from big names like Apple, Amazon and Tesla.
The Zillow report notes that another reason the Austin real estate market is hottest is because it is hot here. In fact, cities in the sun belt in particular, including Austin, Phoenix, Tampa, and Nashville, are expected to outperform the country’s housing growth in 2021.
“These Sun Belt destinations are migratory magnets thanks to relatively affordable family-sized homes, booming economies, and sunny weather,” said Jeff Tucker, senior economist at Zillow, in a press release. “Record-low mortgage rates and increased housing demand, as well as an increase in millennials buying their first homes, will keep house price pressures there for the foreseeable future.”
Other metropolitan areas in Texas that are projected to see residential real estate growth in 2021 include Dallas-Fort Worth, which ranks sixth. 54 percent of real estate experts say the area will beat the national average for home value growth. Also on the list is Houston, in 12th place. 32 percent of the experts say the city will beat the national average.
While Austinites, particularly longtime Austinites, may shy away from calling the local housing market “affordable,” the Zillow report claims the area is far cheaper than expensive communities on the east and west coasts. And it shouldn’t come as a shock to the locals that Austin’s precious culture is key to attracting more residents.
“I think a lot of people during the pandemic were spending a large chunk of their paychecks on rent or mortgage in cities like New York and San Francisco and working from home and suddenly had options,” said Thomas Brown, a Zillow agent in Austin and CEO of the Texas agency. “Your dollar goes a lot farther south, the climate is better, and Austin has a lot to offer from the food scene to outdoor activities to live music. These factors will continue to attract people to the Austin market in 2021. “