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Top Markets in 2021

Zillow Survey Predicts Austin will be the Nation’s Hottest Housing Market, Leading a Sunbelt Surge
More affordable metros are replacing expensive coastal areas as top drivers of home value growth
— A panel of economists and real estate experts expect Austin to outperform the national market by the largest margin, followed by Phoenix, Nashville, Tampa and Denver
— Expensive coastal markets New York, San Francisco and Los Angeles are most likely to underperform, though Zillow expects growth in every market
— Key tailwinds include an improved economic outlook underpinned by progress on coronavirus vaccines, while affordability and available supply are potential drags

SEATTLE, Jan. 19, 2021 /PRNewswire/ — Austin will be America’s hottest housing market in 2021, leading a list of mostly Sun Belt cities expected to continue heating up faster than the nation’s large coastal markets, according to a new Zillow® survey of experts.

The booming Texas destination heads a lineup of sunny and relatively affordable metro areas — PhoenixNashvilleTampa and Denver — that are most likely to outperform the nation in home value growth, according to a panel of economists and real estate experts recently surveyed by Zillow.

The Zillow Home Price Expectations Survey, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks a large panel of economists, investment strategists and real estate experts for their predictions about the U.S. housing market. The Q4 survey also asked about their expectations for 2021 home value growth in 20 large markets compared to the nation.

An overwhelming 84% of those surveyed said Austin values would out-perform the national average, compared to just 9% who believe it would fare worse. Phoenix came in second with 69%, followed by Nashville (67%), Tampa (60%), and Denver (56%). Page views on Zillow for-sale listings in Austin by out-of-town searchers were up 87% in November compared to 2019. 

The top-five metros are all affordable options compared to expensive coastal areas that have led home appreciation ranks in recent years, providing relative value for Millennials looking to take advantage of low mortgage rates to buy their first home. The top five are also, for the most part, sunny locales. Four of the five counties holding the largest cities in these MSAs all rank in the top-third of counties in the contiguous U.S. for average daily sunlight, according to NASA data analysed in The Washington Post. Davidson County, home to Nashville, ranked just below the midline.

“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.”

An improved economic outlook thanks to COVID-19 vaccine roll-outs and better treatments was pegged as the most likely tailwind for the housing market in 2021, followed by sustained strength in first-time home buying among Millennials. It proved a powerful demand driver in 2020 and is expected to persist for years to come.

Link to Zillow Article

Inventory Watch

We’ve only had 193 new listings between La Jolla and Carlsbad this year, which is still running about 20% behind the pre-Covid count last January.  Undoubtedly, there are still sellers that are wary of the risk of opening their home to strangers, but it could also be the backup in lower-priced but desirable areas to which many Californians are moving.

From a realtor in Austin, Texas:

Here on the ground, I can confirm the extreme buyer demand in Austin. Most properties are currently seeing 30-60+ offers with many homes selling $100,000+ above the list price in just 24-48 hours. Inventory is at near zero levels in many neighborhoods and suburbs.

For those potential sellers who are nervous about allowing Covid into your house, here’s my proposition.  Stay in a hotel for the weekend, and I’ll sell your house by Sunday night and have the scrub-down crew sanitize before you come back.  As for where to move…..go where everyone else isn’t!

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Best Beach Towns For Retirement

6. Coos Bay, OR

Median home price: $279,050

Shore Acres State Park, Coos Bay, OR
Shore Acres State Park, Coos Bay, OR Andrei Stanescu / iStock

A good friend works at Bandon Dunes and I’ve been there a couple of times.  It takes all day to get there – fly to SFO then take a 30-seater planer to Bend and then drive two hours – but once you get there, you’re at the coast for a great price!

Most folks probably don’t imagine spending their beachy retirement huddled up under layers of sweaters and blankets, but they’re missing out. The cliff-edged and chilly shoreline of Bastendorff Beach, just a short trip over the bridge from Coos Bay, is gorgeous, a wholly relaxing place to collect shells, pitch a tent, or ride a horse.

Many locals also take whale watching tours by boat, view masterpieces at Coos Art Museum, swing a 9-iron, or watch the pros play golf at the Bandon Dunes Resort, home to the Curtis Cup. Homeowners can look at the bay from their two-bedroom bungalow for just $169,000 or smell the salt air in a grand four-bedroom Dutch Colonial in the heart of town for a cool $649,000.

https://www.realtor.com/news/trends/best-affordable-beach-towns-retirement/

https://www.realtor.com/realestateandhomes-search/Coos-Bay_OR/with_waterfront/with_waterfront

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San Diego Cost-of-Living Comparisons

For most of the long-time homeowners in San Diego County, it was fortuitous to have purchased a home here 10, 20, 30 years ago or more and have racked up huge gains in equity while living in paradise.  For those who are tempted to cash in their home-equity lottery ticket and leave town – or for newcomers who feel priced out – here is a handy tool to compare the cost of living here to other towns:

https://www.payscale.com/cost-of-living-calculator

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Where To Move

Would you move this year if you could figure out where to go?

The chart above helps identify the best values by cross-referencing income and costs.  To no one’s surprise, living in San Diego comes with a hefty premium!

If getting more bang for your buck is important, then they suggest moving to Houston….with Dallas, Las Vegas, Austin and Charlotte also in that quadrant. Phoenix is a great place to retire, and if you don’t mind spending a little more money then Oregon, Washington, Denver, and Miami might be worth considering.

Do you have suggestions for places to move? 🙂

Here’s a brief look at small towns around Arizona:


https://www.realtor.com/realestateandhomes-search/Tubac_AZ

https://www.realtor.com/realestateandhomes-search/Cave-Creek_AZ

https://www.realtor.com/realestateandhomes-search/Pinetop_AZ

Leaving California

The headline for this article is California Loses Hundreds of Thousands of Residents in 2020:

Link to Article

But it sounded far-fetched to me, so I checked the actual press release:

We didn’t lose ‘hundreds of thousands’, which would be at least 200,000 by definition.

We did add 156,600 net new babies – more people to inherit homes later!

The population of San Diego is what matters to us. Further down in the press release they said that the San Diego gain ‘depended mainly on natural increase as the source of population growth’. It means older people are leaving, and they are being replaced by the kids!

Link to CA Press Release

Strongest Housing Markets

We’ve had sellers move to five of these towns this year!

Housing markets are showing resilience against the pandemic, but some are thriving more than others and are expected to continue to perform strongly in the years ahead.

Coinciding with the National Association of REALTORS®’ virtual Real Estate Forecast Summit on Thursday, NAR released a list of the top metros expected to have the strongest housing markets over the next three to five years. Researchers factored in domestic migration, housing affordability for new residents, consistent job growth relative to the national average, population age structure, attractiveness for retirees, and home price appreciation.

The following 10 markets were identified by NAR (listed in alphabetical order):

  • Atlanta-Sandy Springs-Alpharetta, Ga.
  • Boise City, Idaho
  • Charleston-North Charleston, S.C.
  • Dallas-Fort Worth-Arlington, Texas
  • Des Moines-West Des Moines, Iowa
  • Indianapolis-Carmel-Anderson, Ind.
  • Madison, Wis.
  • Phoenix-Mesa-Chandler, Ariz.
  • Provo-Orem, Utah
  • Spokane-Spokane Valley, Wash.

These housing markets likely will carry momentum from 2020 into “2021 and beyond because of strong in-migration of new residents, faster local job market recoveries, and environments conducive to work-from-home arrangements and other factors,” says NAR Chief Economist Lawrence Yun. For example, movers from pricey coastal regions may be drawn to cheaper destinations as companies increase work-from-home policies and make commuting less of an issue.

The trend is already becoming apparent in markets like Phoenix and Dallas, which have attracted the largest number of movers from the West Coast, the report shows.

“Expect these 10 markets to perform strongly, with potential buyers finding conditions particularly favorable to purchase a home,” says NAR President Charlie Oppler. “Overall, residential real estate will continue to be an important driver of our nation’s economic recovery, and the activity in these markets will help lead the way.”

Laguna Row

Brett Farrow is a local architect, builder, and developer – and has been a long-time reader of the blog (you’ve seen him comment here as ‘Mozart’). Yesterday, we got together at his latest project, Laguna Row, and talked about his experiences in the village of Carlsbad:

I also did another tour around the village for an update on the booming redevelopment:

Here is Brett’s website:

https://www.lagunarow.com/

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