2020's Hottest Housing Markets Will Come From the South, While California Sees a Cooldown

Austin's housing market is most expected to outperform the national average, according to a panel of experts surveyed by Zillow

- In a survey of 110 economists and real estate experts conducted by Pulsenomics and Zillow, panelists on average expect U.S. home values to grow by 2.8% in 2020.

- Panelists are most optimistic that Austin, Charlotte, Atlanta and Nashville will outperform the national market.

- Panelists are most pessimistic about the most expensive California markets -- San Francisco, San Jose and Los Angeles.

News provided by

Zillow

Jan 02, 2020, 08:00 ET

SEATTLE, Jan. 2, 2020 /PRNewswire/ -- Led by Austin, housing markets in the southern half of the U.S. will perform the best in 2020, according to a panel of economists and real estate experts recently surveyed by Zillow®.

The Zillow Home Price Expectations Surveyⁱ, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks more than 100 economists, investment strategists and real estate experts for their predictions about the U.S. housing market. The Q4 survey also asked panelists to rate their 2020 expectations for home value growth compared to the nation in 25 large markets.

On average, panelists said they expected U.S. home values to grow by 2.8% in 2020. The share of panelists saying they expected a market to outperform that average was weighed against the share saying they expected it to underperform to create a net score.

Austin is the most likely to see home value growth above that expected average this year according to the panelists, earning a score of 76. A whopping 83% of respondents said they expect the Austin market to outperform the U.S., with only 7% saying it will underperform. Southern markets Charlotte, Atlanta and Nashville were standouts as well, with scores of 59, 51 and 49, respectively. Charlotte was the only market among the 25 analyzed in which none of the panelists said it would underperform.

Of the 14 markets with positive scores, 11 come from Texas or elsewhere in the Southeast or Southwest. The exceptions are Denver, Minneapolis and Portland. Seattle was the most polarizing market, with an even 40% of panelists each expecting it to overperform and underperform.

Of the 10 markets that earned negative scores, meaning more panelists expected them to underperform than overperform, six were in California. A group of expensive markets in the state -- San Francisco, San Jose and Los Angeles -- are expected to perform the worst. Cincinnati and Sacramento round out the bottom five.

"Having subjected buyers to a crucible of fierce competition for multiple years, many West Coast markets hit an affordability ceiling that set off declining home values in the most expensive of these," said Skylar Olsen, Zillow's director of economic research. "Indeed, this price correction -- a clap back from having appreciated with too much exuberance in the recent past -- pushes many previously hot markets to the bottom of our experts' list. At the top of the list are metros still providing relative affordability and thriving, amenity-rich communities that appeal to younger adults willing to make a move. These features, plus the ability to grow and add housing in the future, are attractive propositions for employers and employees alike."

Many panelists expect home values in San Jose and San Francisco to continue falling in 2020, and some expect more markets in California to join them. Sixteen panelists out of the 42 that selected at least one metro said home values will fall in Los Angeles, and twelve said the same about San Diego and Riverside.

U.S. Metropolitan Area	Share Expecting Market to Outperform National Average	Share Expecting Market to Perform About the Same as National Average	Share Expecting Market to Underperform National Average	Net Score
Atlanta	63%	25%	12%	+51
Austin	83%	10%	7%	+76
Charlotte	59%	41%	0%	+59
Cincinnati	12%	42%	46%	-33
Columbus	21%	46%	33%	-12
Dallas	49%	36%	15%	+34
Denver	55%	23%	22%	+33
Houston	32%	46%	22%	+10
Jacksonville	36%	40%	24%	+12
Las Vegas	41%	24%	36%	+5
Los Angeles	20%	25%	55%	-35
Miami	29%	34%	37%	-8
Minneapolis	23%	58%	19%	+4
Nashville	59%	31%	10%	+49
Oklahoma City	18%	48%	34%	-16
Phoenix	46%	42%	12%	+34
Portland	31%	40%	29%	+2
Riverside	21%	32%	47%	-26
Sacramento	21%	28%	52%	-31
San Antonio	44%	44%	12%	+32
San Diego	25%	37%	39%	-14
San Francisco	24%	12%	64%	-40
San Jose	23%	16%	61%	-38
Seattle	40%	21%	40%	0
Tampa	38%	53%	9%	+29

About Zillow
Zillow® is transforming how people buy, sell, rent and finance homes by creating seamless real estate transactions for today's on-demand consumer. Zillow is the leading real estate and rental marketplace and a trusted source for data, inspiration and knowledge among both consumers and real estate professionals.

Zillow's proprietary data, technology and industry partnerships put Zillow at nearly every major point of the home shopping experience, helping consumers search for and get into their new home faster. Zillow now offers a fully integrated home shopping experience that includes access to for sale and rental listings, Zillow Offers®, which provides a new, hassle-free way to buy and sell eligible homes directly through Zillow; and Zillow Home Loans, Zillow's affiliated lender that provides an easy way to receive mortgage pre-approvals and financing. Zillow Premier Agent instantly connects buyers and sellers with its network of real estate professionals to help guide them through the home shopping process. For renters, Zillow's innovations are streamlining the way people search, tour, apply and pay rent for leased properties.

In addition to Zillow.com, Zillow operates the most popular suite of mobile real estate apps, with more than two dozen apps across all major platforms. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG) and headquartered in Seattle.

Zillow and Zillow Offers are registered trademarks of Zillow, Inc.

About Pulsenomics
Pulsenomics LLC (www.pulsenomics.com) is an independent research firm that specializes in data analytics, opinion research, new product and index development for institutional clients in the financial and real estate arenas. Pulsenomics also designs and manages expert surveys and consumer polls to identify trends and expectations that are relevant to effective business management and monitoring economic health. Pulsenomics LLC is the author of The Home Price Expectations Survey™, The U.S. Housing Confidence Survey, The Housing Confidence Index, and The Transaction Sentiment Index. Pulsenomics® , The Housing Confidence Index™, The Transaction Sentiment Index™, and The Housing Confidence Survey™ are trademarks of Pulsenomics LLC.

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ⁱ This edition of the Zillow Home Price Expectations Survey surveyed 110 experts between October 30, 2019 and November 14, 2019. The survey was conducted by Pulsenomics LLC on behalf of Zillow, Inc. The Zillow Home Price Expectations Survey and any related materials are available through Zillow and Pulsenomics.

SOURCE Zillow