Denver is expected to be the fifth-hottest home market in the U.S. in 2021, according to the results of a recent survey published by Zillow Inc.
The Zillow Home Price Expectations Survey takes into account the predictions of more than 100 economists and real estate experts. More than half (56%) said they expected home value growth in Denver to outperform the national average this year.
The panel of experts collectively appears to be bullish on relatively cheaper markets in sunny locales, and less so on expensive coastal cities. Austin, Phoenix, Nashville and Tampa comprise the top four markets that the panel deemed most likely to outperform the rest of the country, respectively.
“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” the Zillow report states. “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.”
Meanwhile, markets such as New York, Los Angeles and San Francisco were predicted to be the most likely to underperform the national average, although Zillow still expects growth in each of those markets.
Last year’s survey respondents pegged Austin as the likely hottest market in 2020, a prediction that was proven to be true. By mid-December, the median list price for homes in the Austin metro was up 23.6% year over year, the largest increase among the 50 largest U.S. markets, according to Zillow.
The results of the survey likely won’t come as a surprise to observers of Denver’s for-sale housing market over the past year. Record-setting home buying activity has pushed active inventory in the 11-county Denver metro to historic lows, while forcing potential buyers to be more aggressive in their offers.
Just 2,541 homes remained on the market at the end of the year after buyers closed on 4,807 homes in the final month, the highest amount recorded in any December, according to Denver Metro Association of Realtors’ latest monthly report.
Roughly 29% of the panelists surveyed expect tight supply conditions and affordability concerns as the greatest potential headwinds for U.S. markets overall. But an improved economic outlook due to availability of the Covid-19 vaccine and better treatments was pegged as the most likely tailwind for the U.S. housing market in 2021.
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Source: Denver Business Journal