Zillow: No Housing Market Will Be Hotter than Austin’s in 2021

Zillow, in an end-of-year report, added further validation to the narrative of Austin being a top relocation destination by predicting the city’s housing market will be the nation’s hottest in 2021.

The Q4 Zillow Home Price Expectations Survey, which was released Jan. 19, projected Austin would be the nation’s top-performing housing market this year, followed by Phoenix, Nashville, Tampa and Denver, respectively.

A panel of economists and real estate professionals were surveyed by Zillow. Each panelist was asked to give their predictions about home value growth in 2021 for 20 large markets across the country.

The Austin metro topped a similar Zillow survey last year — and the high expectations proved accurate, even with Covid-19 dominating most of 2020.

The median list price for homes in the Austin area was up nearly 24%, year-over-year, as of December 2020 — the largest increase amongst the nation’s 50 largest markets, according to Zillow.

About 84% of those surveyed said Austin’s home value growth would outperform the national average, well ahead of the next closest market (Phoenix, 69%). Nashville (67%), Tampa (60%) and Denver (56%) rounded out the top five.

The Covid-19 pandemic has not slowed the housing market in Austin or in the other top five cities, according to the Zillow report.

“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020. These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather,” Zillow’s Jeff Tucker wrote about the five hot markets. “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.”

However, high levels of demand are exacerbating issues with low housing supply in the Austin area. The metro’s housing inventory hit 0.9 months in November, according to the Austin Board of Realtors, the first time it has ever dropped below one month.

Deeper data dive

Other data about Austin shared by Zillow appear to validate the expectations and predictions of those surveyed.

Austin home values have been outpacing national levels almost every year since at least 1996, according to the Zillow Home Value Index. The only exception was mid-2005 to mid-2007. The most recent home value for the Austin metro, according to Zillow’s index, was $368,918 for November, compared with $265,351 nationally. Housing values in Austin have never been as high as they were in November, according to the Zillow Index.

The Zillow Index showed a 11.2% year-over-year percentage increase for home prices in the Austin metro in November, compared with 7.5% growth nationally. December 2013 was the only month on record in the Zillow Index with a larger year-over-year jump in price in Austin, at 11.4%.

The survey was conducted between Nov. 23, 2020 and Dec. 8, 2020 by Pulsenomics LLC and Zillow; 113 economists and real estate professionals were surveyed.

In a separate study, Austin was the top moving destination for people using real estate service Redfin during the fourth quarter. During the final three months of 2020, 10,268 Redfin users moved to Austin, the largest net inflow among the largest U.S. metros, according to the Jan. 19 report. San Francisco was the top origin metro for people moving to Austin.

Courtesy of ABJ. See full article here.