Some of the most popular housing markets during the refinance boom and low-rate era of the past two years are taking a backseat to this year’s new hot destinations.
The buying landscape has cooled, but this year’s most attractive metros will offer strong home value growth forecasts, solid local job growth and a healthy buyer pool, according to a Zillow analysis. Pandemic boomtowns like Austin and Denver now appear overheated compared to affordable Sun Belt and Midwest cities.
“This year’s hottest markets will feel much chillier than they did a year ago,” said Anushna Prakash, economic data analyst at Zillow, in a press release. “Home shoppers who can overcome affordability hurdles will find a more comfortable market this year, with more time to consider options and less chance of a bidding war.”
Metros like Sacramento, San Jose and Minneapolis, commonly identified in recent years as coveted destinations, are now among the coolest markets and will see home value declines and properties spending longer times on the market, Zillow said.
On the other hand, this year’s hottest cities will experience modest home value growth in the next 12 months, a relief for homebuyers reeling from prices beginning to fall back from record highs and mortgage rates still over 6%. More domiciles in each of these metros also sell under the listing price rather than over it, according to Zillow data.
The real estate firm ranked the cities on metrics including forecasted annual home value appreciation by this upcoming November; forecasted acceleration in home value appreciation year-over-year; and the projected change in owner households year-over-year, among other data points.
