Sacramento, Calif., San Jose, Calif. and Charlotte, N.C. are forecasted to see the highest home price appreciation and sales growth in 2021
SANTA CLARA, Calif., Dec. 7, 2020 /PRNewswire/ — Millennial homebuyers, relative affordability, and strong local economies will drive realtor.com®’s Top Markets of 2021 to lead the nation in a year when real estate is expected to be strong coast to coast. This year’s list in rank order includes: Sacramento, Calif., San Jose, Calif., Charlotte, N.C., Boise, Idaho, Seattle, Phoenix, Harrisburg, Pa., Oxnard, Calif., Denver, and Riverside, Calif. (see below for full 100 market ranking).
Based on realtor.com®’s local market forecast, the areas on this list are expected to see the strongest home price and sales growth in the U.S. in 2021. In fact, home prices across the top 10 markets are forecasted to increase by 6.9% and sales by 13.1% year-over-year, which is significantly higher than the national projection of 5.7% price appreciation and 7.0% sales growth.
“This past year, we’ve all become more reliant on technology to work, learn, and maintain personal connections. The technology hubs that make this possible are thriving, as are their housing markets,” said realtor.com®’s Chief Economist, Danielle Hale. “Additionally, the relative stability of government jobs in the past year has driven home prices and sales in several state capitals to the top. Home buyers, particularly younger first-time buyers, looking in one of these markets should expect rising prices and heavy competition. Meanwhile, sellers will remain in a position of power, but will find themselves on the other side of the bargaining table when buying their next home.”
A common driver of this year’s top markets is the prevalence of high paying tech jobs. Tech salaries in Sacramento, San Jose, Boise, Denver, and Seattle have driven home prices through the roof over the last several years and this trend is expected to continue in 2021. Additionally, areas such as Charlotte and Phoenix are quickly establishing themselves as rising tech hubs with a plethora of jobs in technology, as well as education, government and healthcare. In fact, the projected unemployment rate for 2021’s top markets is 7.9% compared to the national average of 8.2%. Tech-related jobs make up an average of 8.7% of the workforce in this year’s top markets list compared to 6.4% of the U.S. as a whole.
Home prices in eight of the top 10 markets are more expensive than the average of the top 100 markets. But many are relatively affordable when compared to their nearby counterparts or offer significantly more square footage for a similar price. For example, buyers priced out of New York ($216 per sq.ft.) can find increased space and affordability in Harrisburg ($122 per sq.ft.), while buyers in Sacramento ($284 per sq.ft.) can get more bang for their buck than nearby San Francisco ($679 per sq.ft.). This is also true when comparing Oxnard ($413 per sq.ft.) and Riverside ($247 per sq.ft.) with Los Angeles ($556 per sq.ft.).
On average, the top 10 markets have a larger share of millennials (14.1%) than the U.S. as a whole (13.5%). A market’s ability to lure millennials is a good indicator of the livability of the area including: job opportunities, dining, and entertainment. However, when it comes to millennials purchasing homes in the top 10, two trends are emerging. In half of this year’s top markets, including: Charlotte, Boise, Phoenix, Harrisburg and Riverside, millennials are already homeowners and expected to make the majority of the home purchases that drive home price growth and sales. In the other group of markets, such as San Jose, Seattle, and Denver, the high cost of living has made homeownership a difficult accomplishment, not only for millennials but for all generations. The high number of millennials in the market shows how popular these markets have become, but older, more financially established generations will be the ones purchasing the majority of the homes next year.
Half of the top markets are state capitals, including: Sacramento, Boise, Phoenix, Harrisburg and Denver. The strong government presence in these areas offers stability for their local economy and jobs markets. This is especially important after a year when a global pandemic has significantly disrupted local economies across the nation. On top of the government jobs, these areas also have strong job diversity in both the public and private sectors, including education, healthcare, technology, manufacturing and military, which is positioning them for solid growth in the future. The average GDP growth rate for the top markets is forecasted to be 5.34% in 2021, versus 4.85% for the top 100 metros.
2021 Top Markets
Median home price: $554,050
Home price change: +7.4 percent
Sales change: +17.2 percent
Combined sales and price growth: +24.6 percent
Sacramento takes first place on this year’s top markets list. Due to the increased freedom to work remotely, buyers from the San Francisco Bay Area are flocking to California’s state capital for the increased affordability, without having to completely uproot their lives in Northern California. The area draws a diverse crowd ranging from first time homebuyers to empty nesters looking to downsize. Many young families are also drawn to Sacramento for the area’s strong school system, including West Campus high school which has a 99% graduation rate and received a 10/10 on greatschools.org. When residents want a change of scenery, it’s a short trip to Lake Tahoe, wine country or San Francisco.
Median home price: $1,199,050
Home price change: +10.8 percent
Sales change: +10.8 percent
Combined sales and price growth: +21.6 percent
Also located in Northern California, San Jose is the largest city in Silicon Valley. Apple, Google, Facebook, Linkedin and even realtor.com® are all within commuting distance of San Jose. Unsurprisingly, the area’s strong economy and top notch school system, including Lynbrook High School (10/10 greatschools.org), lure top tech talent from all over the country. Those looking for a change of scenery can easily drive to San Francisco or the nearby mountains. Without a ton of room for new construction, inventory in the area is tight, so serious buyers should expect to pay above asking price.
Median home price: $368,819
Home price change: +5.2 percent
Sales change: +13.8 percent
Combined sales and price growth: +19.0 percent
Rounding out the top three on this year’s top markets list is Charlotte. The area’s high quality of life, great weather, strong school system including Providence High (10/10 greatschools.org) and rich history draw a diverse mix of both young and old buyers. Millennials are beginning to transition from the downtown city center toward the suburbs as they raise families and take advantage of the increased affordability and extra space. With access to both the beach and mountains, Charlotte has something for everyone, including kayaking along the Catawba River and hiking the Carolina Thread Trail. Housing supply has been tight, but new construction is booming as builders try to meet current demand. Charlotte was No. 7 on 2018’s top markets list.
Median home price: $445,000
Home price change: +9.1 percent
Sales change: +9.8 percent
Combined sales and price growth: +18.9 percent
Idaho’s capital city is firmly establishing itself as a rising tech hub in the U.S. The area’s high quality of life and strong economy draw people from all over the country, with the biggest influx coming from Washington, Oregon and California. This trend has accelerated as the ability to work remotely has drawn many young workers looking for a slower pace of life, increased affordability, and access to the area’s many outdoor amenities. Boise offers residents a mild four season climate, a vibrant revitalized downtown with plenty of entertainment, as well as a plethora of restaurants and boutique shopping. Outdoor enthusiasts are drawn to the area’s adrenaline pumping outdoor activities such as white water rafting and four different ski resorts. New construction has been booming in Boise over the past few years as builders scramble to keep up with rising demand. Boise is no stranger to realtor.com®’s Top Markets list, it was No. 1 in 2020 and No. 8 in 2019.
Median home price: $629,050
Home price change: +9.7 percent
Sales change: +8.9 percent
Combined sales and price growth: +18.6 percent
Coming in fifth is Seattle, which is home to some of America’s largest and most well known companies including: Amazon, Starbucks, Costco, Microsoft and Nordstrom. The area’s booming tech scene, high quality of life, and access to both the water and mountains draws a crowd from all over the country. New and growing families will find a strong school system, including Greenwood Elementary School which scored a perfect 10/10 on greatschools.org, as well as four other schools which received scores of 9/10. Driven by high home prices and the desire for more space, buyers are beginning to search for homes further from the downtown center. This is especially true for first time homebuyers.
Median home price: $412,260
Home price change: +7.0 percent
Sales change: +11.4 percent
Combined sales and price growth: +18.4 percent
Arizona’s state capital has become a magnet for both younger buyers looking to take advantage of the affordable cost of living, as well as retirees who want to soak up the sun. Recently, the area has seen a large influx of people from pricey West Coast markets — San Francisco, Seattle and Portland. While builders have struggled to meet the rising demand for housing, Phoenix set a record for new home permits in March, April and May, so new inventory is on the way. Phoenix offers residents all the big city amenities of shopping, dining and entertainment, without the traffic of larger metropolitan cities. Additionally, those who want to get out and hit the golf course have over 400 courses to choose from. Phoenix is a business friendly city and has a diverse list of large employers in both the public and private sectors from education, government and healthcare to technology, manufacturing and military. Phoenix was No. 5 on 2019’s top markets list.
Median home price: $262,000
Home price change: +3.8 percent
Sales change: +14.4 percent
Combined sales and price growth: +18.2 percent
The state capital of Pennsylvania has become a hot spot for buyers looking for the quiet suburban lifestyle, more space, and increased affordability. Harrisburg is centrally located near New York, Baltimore, Washington D.C., Pittsburgh and Philadelphia. Millennials in particular have been drawn to the area as both first time homebuyers and move-up buyers looking for more space for their growing families. Harrisburg boasts a strong job market not only for government employees working at the state capital, but those in healthcare and shipping industries as well. One of the biggest draws to the area is the ability to go from downtown, to the suburbs, to more rural areas, in under 15 minutes.
Median home price: $824,000
Home price change: +5.5 percent
Sales change: +12.5 percent
Combined sales and price growth: +18.0 percent
Located north of Los Angeles on the Pacific Coast is Oxnard, Calif. The area is a mix of farmland and Pacific Coast beaches, such as Hollywood Beach — a second home market for wealthy Angelanos looking for a break from the hustle and bustle of city life. Farmers in the area grow strawberries and lima beans and the annual Strawberry Festival is a big draw for Southern California locals. Thanks to its affordability, the area has seen a boost in demand from buyers seeking relief from Los Angeles and Orange County home prices. Beach homes in the area are significantly more affordable than those in Malibu or Santa Monica, making this a popular alternative for buyers hoping to get more bang for their buck.
Median home price: $520,000
Home price change: +5.4 percent
Sales change: +12.5 percent
Combined sales and price growth: +17.9 percent
Colorado’s state capitol is located just outside of the Rocky Mountains. The area’s housing market has been red-hot for the last several years and builders have struggled to keep up with the high demand for housing. Though the city is rapidly expanding, it still holds much of its Old West charm, and its cost of living remains relatively affordable compared to other Western markets. Many of Denver’s residents are outdoor enthusiasts who love to take advantage of the area’s easy access to mountains, rivers and lakes. No matter the season, there is an outdoor activity closeby. Denver’s high quality of life is a major draw for many residents, as well as all the amenities of downtown. With boutique shopping, dining, and endless entertainment, the area has been supremely popular with millennials. Due to the area’s spike in demand, home prices have grown rapidly, causing many first time home buyers to search further out from the downtown center.
Median home price: $475,050
Home price change: +5.5 percent
Sales change: +12.4 percent
Combined sales and price growth: +17.9 percent
Located in the Inland Empire, Riverside, Calif., is named for its location along the Santa Ana River. Riverside draws many people who want to take advantage of Southern California’s temperate weather, but don’t want to pay Los Angeles or Orange County home prices. Riverside is centrally located, just 30 minutes to the beach, mountains or desert, making it a great location for anyone that loves to be outdoors. Additionally, it’s in close proximity to Southern California’s attractions of Disneyland in Anaheim, skiing in the San Bernardino Mountains, wine tasting in Temecula or the endless entertainment in Los Angeles. Due to Southern California’s high cost of living, Riverside’s relative affordability and strong school system including Riverside Stem Academy (9/10 greatschools.org), have made it a popular destination for first time homebuyers, growing families, and retirees.
For more information and methodology, click here.
2021 Top Housing Markets Ranked
San Jose-Sunnyvale-Santa Clara, Calif.
Boise City, Idaho
Oxnard-Thousand Oaks-Ventura, Calif.
Riverside-San Bernardino-Ontario, Calif.
Los Angeles-Long Beach-Anaheim, Calif.
Las Vegas-Henderson-Paradise, Nev.
El Paso, Texas
North Port-Sarasota-Bradenton, Fla.
San Diego-Carlsbad, Calif.
Palm Bay-Melbourne-Titusville, Fla.
Tampa-St. Petersburg-Clearwater, Fla.
Dallas-Fort Worth-Arlington, Texas
Kansas City, Mo.-Kan.
Hartford-West Hartford-East Hartford, Conn.
Charleston-North Charleston, S.C.
Salt Lake City, Utah
Austin-Round Rock, Texas
Grand Rapids-Wyoming, Mich
Milwaukee-Waukesha-West Allis, Wis.
Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.
New Haven-Milford, Conn.
Deltona-Daytona Beach-Ormond Beach, Fla.
Colorado Springs, Colo.
San Antonio-New Braunfels, Texas
Louisville/Jefferson County, Ky.-Ind.
Greensboro-High Point, N.C.
Miami-Fort Lauderdale-West Palm Beach, Fla.
Buffalo-Cheektowaga-Niagara Falls, N.Y.
Lakeland-Winter Haven, Fla.
Virginia Beach-Norfolk-Newport News, Va.-N.C.
Houston-The Woodlands-Sugar Land, Texas
Atlanta-Sandy Springs-Roswell, Ga.
Des Moines-West Des Moines, Iowa
San Francisco-Oakland-Hayward, Calif.
New Orleans-Metairie, La.
Spokane-Spokane Valley, Wash.
Baton Rouge, La.
Durham-Chapel Hill, N.C.
Oklahoma City, Okla.
Portland-South Portland, Maine
Augusta-Richmond County, Ga.-S.C.
St. Louis, Mo.-Ill.
Urban Honolulu, Hawaii
Omaha-Council Bluffs, Neb.-Iowa
Cape Coral-Fort Myers, Fla.
Minneapolis-St. Paul-Bloomington, Minn.-Wis.
Little Rock-North Little Rock-Conway, Ark.
New York-Newark-Jersey City, N.Y.-N.J.-Pa.
*Ranked by Combined Growth. In cases of a tie, Sales Growth y/y was used as a tiebreaker.
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Cody Horvat, email@example.com
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