Austin, Texas, could be the hottest real estate market of 2021, according to two trend reports released Tuesday by both Zillow and Redfin.
Thomas Brown | Photo credit: The Agency Texas
Zillow’s quarterly Home Price Expectations Survey, which taps a panel of economists, investment strategists and real estate experts, identified Austin as the market with the highest likelihood of outperforming the national average of home price increases in 2021, with 84 percent of respondents thinking it would outperform.
A number of southern and Sun Belt metro areas followed close behind, with the more classically expensive coastal metros like Los Angeles, New York and San Francisco falling behind.
“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,” Thomas Brown CEO of The Agency Texas and a Zillow Premier Agent, said in a statement.
“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,” Brown added. “Those factors are going to continue drawing people into the Austin market in 2021.”
The prediction of Austin topping the nation’s metros in price growth isn’t exactly out of left field. Last year’s survey also predicted Austin would lead the way as the nation’s hottest metro, and even with the unforeseeable pandemic, that prediction was correct.
After Austin, respondents to the Zillow survey identified Phoenix, Arizona, and Nashville, Tennessee, as the second and third hottest markets.
New York was forecasted to be the coolest market, with 82 percent of respondents expecting price growth the fall below the national average, followed by San Francisco and Los Angeles.
A recent migration trend report from the tech-focused real estate brokerage Redfin seems to back up the prediction that Austin could be the hottest market in 2021.
Austin, Las Vegas, Phoenix, Sacramento and Dallas led the way with more people looking to move in than out in the fourth quarter of 2020, according to Redfin data.
Nearly 43 percent of home searches in Austin in the fourth quarter came from out of town — with San Fransisco residents leading the way — up from 32.5 percent a year earlier, according to the survey. It’s the first time Austin has topped the list of most popular destinations since Redfin began tracking migration patterns.
Miami, Florida, actually saw a larger net inflow increase — more people coming in than going — in the fourth quarter of 2020. Like Austin, Miami is experiencing an influx of residents from expensive coastal cities.
“We’re seeing a lot of buyers from California, Washington and New York, and the out-of-towners are driving up prices,” Miami Redfin agent Cecilia Cordova said in a statement. “Relatively low home prices and Florida’s low taxes make the Miami area attractive, particularly for buyers of high-end and second homes.”
“The pandemic has made it even more popular, due both to remote work and the fact that more businesses are open in Florida and there are fewer COVID restrictions than many East Coast and West Coast states.”