Based on a blend of factors, such as job and home price growth, Zillow expects housing markets in the Sun Belt to be the most competitive in the U.S.
– The Sun Belt dominates Zillow’s list of hottest housing markets for the second year in a row. Tampa, Jacksonville, Raleigh, San Antonio and Charlotte top Zillow’s rankings.
– Six of the 10 markets on Zillow’s list have added more jobs than new homes over the past two years, adding competition for available homes.
– New York, Milwaukee and San Francisco should be the coolest housing markets in 2022, but sellers will have the upper hand even in cooler markets.
The hottest housing market of 2022 will be Tampa, according to a new Zillow® analysis. Rounding out the top five are Jacksonville, Raleigh, San Antonio and Charlotte in what is anticipated to be another hot year for housing across the Sun Belt.
Zillow economists expect the housing market to back off just a bit from a record-breaking pace in 2021, but home shoppers looking in the 10 hottest markets are likely to face strong competition, rising prices and limited inventory that will be snatched off the market quickly. Tampa tops Zillow’s list of hottest housing markets due to a combination of strong forecasted home value growth, a thriving job market, relatively scarce and fast-moving inventory, and demographics that indicate a good number of potential buyers.
“Home buyers are attracted to markets in the Sun Belt that offer relative affordability, fast-growing economies and weather that allows them to enjoy the outdoors year-round,” says Zillow economist Alexandra Lee. “Across the board, sellers will remain in the driver’s seat, but especially so in the hottest markets. Buyers should be ready for strong competition for homes, which means bidding wars and homes flying off the market only days after they are listed.”
Zillow’s 10 hottest housing markets of 2022:
- San Antonio
With the huge millennial generation’s pent-up desire to move now being fulfilled as it ages into its peak home-buying years, together with the wave of baby boomers entering retirement amid the “Great Resignation,” Zillow economists expect incredibly strong price appreciation and sales volume to continue into next year — forecasting 14.3% national home value growth through November 2022. Each of the top 10 hottest metros are anticipated to exceed that, with Tampa home values predicted to grow 24.6% during that time.
Work will play a key role in moving decisions next year — for remote and on-site workers alike — and a strong labor market has factored into Zillow’s hottest markets list, as well. With more flexible work opportunities and a recovering labor market, many areas experiencing high demand for housing are also seeing increased local job growth. Six of the 10 markets on Zillow’s list have added more jobs than new homes over the past two years, intensifying the competition expected in these markets.
Last year’s hottest market, Austin, fell to No. 10 this year, while Denver, last year’s fifth-hottest market, fell to 15th. Outside of the Sun Belt, the hottest markets are expected to be in the Midwest. Salt Lake City (13th overall), Kansas City (14th), Oklahoma City (16th) — which is sometimes considered a Sun Belt city depending on where the border is drawn — Columbus (17th) and Indianapolis (18th) just missed making the list.
The coolest markets out of the 50 largest U.S. metro areas are expected to be New York, Milwaukee, San Francisco, Chicago and San Jose. But in today’s supercharged housing market, buyers shouldn’t necessarily expect screaming deals in even these cooler markets. Home values are forecasted to grow by at least 10% over the next 12 months in all metros except San Francisco (9.9%).
Zillow analyzed the 50 largest U.S. metro areas to forecast the hottest, or most competitive, housing markets of 2022. The analysis incorporates expected home value appreciation from November 2021 to November 2022, the anticipated change in home value appreciation from 2021, the flow of for-sale inventory, an estimate of the net new number of home-owning households based on current demographic trends and new jobs per new housing unit permitted.
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