In news that is likely to surprise no one, experts say Austin is expected to be the hottest housing market in the nation in 2021 — again.
According to the Q4 2020 Zillow Home Price Expectations Survey, real-estate experts, economists, and investment strategists say Austin will outperform the national housing market by the most significant margin. The report, which was conducted by independent research company Pulsenomics, includes predictions about home-value growth in the largest 20 U.S. markets in 2021.
Though the report calls Austin’s available housing supply and questionable affordability “potential drags,” experts point to “an improved economic outlook underpinned by progress on coronavirus vaccines” as a key component of the Austin market’s housing growth.
Experts had previously predicted Austin’s housing market would be the hottest in 2020. By mid-December, when the median list price for homes in the Austin metro area had risen year-over-year by more than 23 percent — the biggest increase among the 50 largest U.S. markets — it was clear the Capital City would outpace all other large markets in 2020, according to the report.
Driving the housing growth in Austin are a number of factors, among them the seemingly immense exodus of tech companies and workers from the West Coast to Central Texas. This presumption is supported by the Zillow report, which notes San Francisco and Los Angeles land at the bottom of the 20-city list in terms of predicted housing growth this year, alongside New York City.
Even the New York Times recently noted the massive influx of techie San Franciscans moving to Central Texas, claiming Austin is their No. 1 relocation spot, with the paper saying it is the Texas city closest in spirit to the Bay Area and calling out recent news of growth in the local tech industry from such big-name players like Apple, Amazon, and Tesla.
The Zillow report notes another reason Austin’s housing market is the hottest is that, well, it’s hot here. In fact, it is mostly Sun Belt cities, including Austin, Phoenix, Tampa, and Nashville, that are expected to outperform the nation’s housing growth in 2021.
“These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies, and sunny weather,” Jeff Tucker, a Zillow senior economist, said in a release. “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.”
Other Texas metro areas predicted to see housing growth in 2021 include Dallas-Fort Worth, which claimed the No. 6 spot, with 54 percent of real-estate experts saying the area will outperform the national home-value-growth average. Also appearing on the list is Houston, which ranked 12th, with 32 percent of experts saying the city will outperform the national average.
While Austinites, particularly longtime Austinites, might balk when the local housing market is referred to as “affordable,” the Zillow report asserts the area is vastly more affordable than expensive communities on the East and West coasts. And it should come as no shock to locals that the key to attracting more residents is Austin’s prized culture.
“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,” says Thomas Brown, a Zillow agent in Austin and CEO of The Agency Texas. “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.”