Zillow Says This City Will Have the Hottest Housing Market in 2021

Coming off a record year for home sales. Zillow is forecasting these cities will be the hottest (or coldest) markets in 2021.

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Despite a banner year for home sales in 2020, not all housing markets are expected to continue that upward trend in 2021. Zillow forecast its five hottest and coldest U.S. housing markets for the new year, tabbing Austin, Texas, as the hottest housing market and New York City as the coldest. The top four markets are all in warm climates, while three of the bottom five are in cold climate regions in the U.S.

“These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather,” Jeff Tucker of Zillow wrote. “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.”

Zillow compiled its rankings based on the Q4 2020 Zillow Home Price Expectations Survey, which asked a “large panel of economists, investment strategists and real estate experts for their predictions about the U.S. housing market.” Zillow sponsored the survey.

Hottest housing markets

  1. Austin, TX;
  2. Phoenix, AZ;
  3. Nashville, TN;
  4. Tampa, FL;
  5. Denver, CO.

According to Tucker, Austin had been predicted to be the hottest housing market in 2020 as well, which held true. Austin median home prices increased 23.6 percent year-over-year.

Coldest housing markets

  1. New York, NY;
  2. San Francisco, CA;
  3. Los Angeles, CA;
  4. Philadelphia, PA;
  5. Minneapolis, MN.

That New York and Los Angeles are both expected to do poorly reverses a 2020 trend.

“While sustained tailwinds are forecasted this year across most of the shifting U.S. housing landscape, certain densely populated markets with high-priced real estate face prevailing headwinds,” Pulsenomics founder Terry Loebs told Zillow. “Accordingly, home value appreciation rates within coastal cities such as New York, San Francisco, and Los Angeles are projected to see a downshift from last year’s remarkable levels.”