The Top Housing Markets for 2020 May Surprise You
With a lack of inventory and affordability concerns in many locations, homebuyers are opting to purchase in alternative locations, especially first-time homebuyers. Thanks to factors such as strong local economies, job creation and available inventory at the entry-level price point, several unexpected locations are topping realtor.com®’s housing market list for next year, including Boise, Idaho, McAllen, Texas, and Tucson, Ariz.
According to realtor.com®'s recently released analysis of the 100 largest metros, based on projected home sales and price data, there is a clear trend of people moving from expensive coastal cities to more affordable areas inland. In fact, nine out of 10 of 2020's hottest markets are not on the coast, a significant change from last year when four out of 10 markets were on or near the water. Boise, in fact, jumped from the No. 8 position last year to the top spot for 2020, thanks to an influx of out-of-state buyers.
Here’s realtor.com®’s predictions for the top 10 housing markets next year:
- Boise, Idaho
- McAllen-Edinburg-Mission, Texas
- Tucson, Ariz.
- Chattanooga, Tenn.
- Columbia, S.C.
- Rochester, N.Y.
- Colorado Springs, Colo.
- Winston-Salem, N.C.
- Charleston-North Charleston, S.C.
- Memphis, Tenn.
Realtor.com® expects home sales in these top 10 markets to increase by 2.4 percent, with prices increasing 3.1 percent on average year-over-year. This is in contrast to a 1.8 percent decrease in home sales and a 0.8 percent increase in sales prices nationwide, according to the realtor.com® 2020 housing forecast.
"Many of the markets on this year's list are late bloomers in the current housing cycle, meaning they still have plenty of inventory and prices are within reach—a rare combination in recent years," explains George Ratiu, senior economist, realtor.com®. "Additionally, a number of the top markets in 2020 are welcoming an influx of buyers from nearby large cities that have become crowded, expensive and lack sufficient inventory."
The reasons for the rise in these markets include:
Buyers have more choice. This year's list represents markets that have sufficient inventory at the entry-level price point.
Sister cities. Many of the markets on this year's list are smaller cities that are handling overflow from nearby larger cities that have become crowded and unaffordable. For example, Colorado Springs is an alternative to rising prices in Denver, and Memphis and Chattanooga are affordable options to Nashville.
University towns. The majority of top markets are home to a college or university, and are benefitting from the trend. Rochester, N.Y., for example, is home to two large universities.
Retirement boom. Cities like Tucson, Ariz., Winston-Salem, N.C., Columbia, S.C., and Charleston, S.C., have become popular retirement destinations for baby boomers looking to escape the high property tax rates that are common in the Northeast.
"As a whole, millennials are driving the housing market, but what's interesting in this year's list is that not all of our cities fall into that category. In fact, only half of this year's top 10 are millennial markets, and the other half are being driven by retirees and mid-lifers leaving more expensive coastal cities," adds Ratiu.