What makes a specific housing market ideal depends on who’s looking at the information. While one person may be focused most on where they can get a house for cheap, others may have the highest possible sale price in mind. More than anything, if you’re buying property you want to feel secure that its value will grow to make your investment pay off down the line.
But how do you know which housing markets will make for a better investment? U.S. News looked at a few key data points that matter most and broke down the 10 housing markets leading the pack for 2021.
How U.S. News Determined the Top Housing Markets
To get a better look at which markets are showing significant price growth, fast sales and a more sustainable inventory of homes on the market, U.S. News pulled from the most recent data available from real estate information company Zillow. We looked at the median home sale price for November 2020, the most recent month available and how it compared to the median price in November 2019.
To help reduce the chance that prices are climbing solely for lack of inventory, which is the case in many parts of the U.S. right now, we also looked at which markets are seeing the lowest drop in inventory, based on December 2020 data (the most recent month available for this data) compared to December 2019.
Finally, we examined interest and buyer activity by looking at Zillow’s data regarding the median days on market until the property was marked as pending sale for each market in December 2020.
We ranked the 96 metro areas that Zillow provides data for in each category, then found which markets rank best in all three categories to determine the top 10 housing markets right now.
[See: 25 Best Places to Live in the U.S. for Quality of Life.]
Here are the top housing markets in the U.S.
— Seattle.
— Tucson, Arizona.
— Sacramento, California.
— Cincinnati.
— Boston.
— San Francisco.
— Wichita, Kansas.
— Columbus, Ohio.
— San Jose, California.
— Ventura, California.
1. Seattle
Median Home Price: $565,710
Year-Over-Year Price Growth: 16.19%
Year-Over-Year Inventory Growth: -8.36%
Median Days on Market Until Pending: 21
Seattle hasn’t been considered an affordable housing market for some time, but you can trust the interest in the Pacific Northwest metro area isn’t going away anytime soon. The median home price in November 2020, at $565,710, was a 16.19% increase compared to the same time a year prior.
Looking at available inventory of homes for sale, the number dropped more than 8% in December 2020 compared to December 2019, but relative to many other metro areas in the U.S. it’s a more sustainable supply of homes. Plus, even with work-from-home becoming the norm for many office jobs in the COVID-19 pandemic, you can trust living in the Seattle area to remain highly desirable for many people looking to work at the headquarters of Amazon, Microsoft or Starbucks.
Median Home Price: $256,980
Year-Over-Year Price Growth: 16.05%
Year-Over-Year Inventory Growth: -20.72%
Median Days on Market Until Pending: 26
Compared to Seattle, Tucson has a much lower threshold to homeownership — with the median sale price at $256,980 in November 2020 — but it’s still seeing plenty of positive activity in the housing market. Homes listed for sale in the Tucson metro area are marked as pending in a median 26 days, and the median home price grew more than 16% year over year in November 2020.
Tucson certainly appeals to people looking to living in the warm climate of southern Arizona or for the University of Arizona, which is based in the city. Tucson isn’t necessarily seeing a major influx of new residents nor is it seeing many people moving out of the metro area. Much of the reason for its seller’s market — where sellers have the advantage over buyers — is many people are staying put in their homes. The number of properties on the market dropped more than 20% in December 2020 compared to 2019.
Median Home Price: $475,792
Year-Over-Year Price Growth: 14.01%
Year-Over-Year Inventory Growth: -23.94%
Median Days on Market Until Pending: 22
Compared to many parts of the U.S., the median home price of $475,792 in Sacramento may seem sky-high, but it’s considered pretty affordable for California housing markets (a few of which are included on this list). Sacramento’s role as the state capital ensures that it plays a fundamental part in how California runs as a state, but it also doesn’t have the same industries that attract companies and people to San Francisco or Los Angeles — industries that also drive home prices well outside the affordability range for many.
With a median of just 22 days on the market until a home is marked pending and a decrease of available inventory by 23.94% in December 2020 compared to December 2019, people shopping in the Sacramento market should expect fierce competition to buy a house. Offers come in fast, and you can expect multiple offers that you have to compete with as well.
4. Cincinnati
Median Home Price: $207,865
Year-Over-Year Price Growth: 13.78%
Year-Over-Year Inventory Growth: -22.21%
Median Days on Market Until Pending: 24
With a median home price of $207,865 in November 2020, Cincinnati’s sales price increased 13.78% year over year. The lower cost of homes in Cincinnati certainly opens up for more people to be able to buy a home. The homeownership rate in the Cincinnati metro area is 67%, according to the U.S. Census Bureau’s 2019 American Community Survey.
Especially as long-term priorities have shifted for consumers in the pandemic, a lower-cost metro area with more single-family options and a high homeownership rate become a more attractive option. You’re more likely to be able to afford the move from renting to owning a home in a place like Cincinnati because a down payment requires less extensive savings, and you’re more likely to be able to afford a larger home or piece of property without necessarily sacrificing location.
5. Boston
Median Home Price: $535,850
Year-Over-Year Price Growth: 14.59%
Year-Over-Year Inventory Growth: -17.33%
Median Days on Market Until Pending: 31
While a median home price of $535,850 may not sound too intimidating for a desirable and dense metro area like Boston, it’s important to keep in mind that living in the city of Boston yields a much higher home price, while lower home values are found in suburbs on the outskirts of the metro area. The pandemic accelerated a trend for more homebuyer interest in suburban settings, however, and while prices aren’t going to plummet in the center of Boston, a homebuyer interested in a condo downtown may find less competition than when making an offer on a house in the suburbs.
Boston’s inventory of properties on the market dropped by 17.33% year over year in December 2020, and while that makes a competitive market still more competitive, active homebuyers in the Boston area aren’t struggling to beat out other offers with the same intensity as many other parts of the U.S.
[SEE: The Best Places for Singles to Live in 2020-2021.]
Median Home Price: $895,760
Year-Over-Year Price Growth: 12.93%
Year-Over-Year Inventory Growth: 18.65%
Median Days on Market Until Pending: 29
If you’re living in San Francisco, you know the cost of living is high, and the cost of owning real estate is even higher. The good news, however, is that the market has eased to increase the number of available homes on the market, while prices still continue to climb — which should ease any worries among people who already own a home in the metro area.
San Francisco’s median home price in November 2020 was $896,760, a 12.93% increase from November 2019. The available inventory of homes for sale in December, however, has increased by 18.65% year over year. San Francisco is one of the few metro areas among the 96 metro areas examined for this list to see positive growth in the number of homes for sale. While plenty of people are still buying, there is less of a dearth of homes for sale to push prices to artificially high levels.
Median Home Price: $174,430
Year-Over-Year Price Growth: 13.67%
Year-Over-Year Inventory Growth: -18.38%
Median Days on Market Until Pending: 29
Wichita is not seeing an influx of new residents to drive demand, but homeowners looking to sell are benefiting from the decrease in competing homes on the market as many people choose to stay put. The median home price of $174,430 in November is a 13.67% increase compared to November 2019. At the same time, December’s inventory of available homes dropped more than 18% compared to the same time in 2019.
Where other metro areas, such as Dallas-Fort Worth or Austin, Texas, may have a leg up on Wichita is the promise of continued demand from new residents. Between 2014 and 2018, Wichita’s population shrank by 0.75% when looking at net migration, according to the U.S. Census Bureau. While that may not be ideal, buyers concerned about competing offers are more likely to be dealing with other locals, rather than people with bigger wallets moving from more expensive metro areas.
Median Home Price: $236,662
Year-Over-Year Price Growth: 14.97%
Year-Over-Year Inventory Growth: -28.71%
Median Days on Market Until Pending: 21
While pricier than Wichita, Columbus is another of the metro areas in the top housing markets that has a lower threshold to homeownership, with a median December home price of $236,662. Compared to December 2019, the median home price grew by nearly 15%.
Columbus is another metro area that is well-positioned for current homebuyer preferences, with extensive residential areas that offer a more suburban setting not just in the surrounding suburbs, but in the city of Columbus itself. Still, buyers should be ready to move quickly — homes spent a median of 21 days on the market before going pending in December, according to Zillow.
Median Home Price: $1,171,726
Year-Over-Year Price Growth: 14.03%
Year-Over-Year Inventory Growth: 12.38%
Median Days on Market Until Pending: 34
The priciest housing market in the country limits who is capable of buying a home purely by price — the median home price in San Jose in November was nearly $1.2 million, according to Zillow. For those interested in buying in San Jose, however, the positive year-over-year inventory growth in December of 12.38% should help ease demand somewhat.
If you’re unfamiliar with the San Jose metro area, you might have a bit of sticker shock, but median prices over $1 million have been par for the course in this metro area for years. Homeowners in the metro area can feel secure that while it’s always possible for the real estate cycle to cause temporary dips in home value and buyer interest, San Jose’s position as the capital of Silicon Valley will keep it highly desirable for real estate in the long term.
[See: The 25 Best Affordable Places to Live in the U.S. in 2020-2021.]
Median Home Price: $674,090
Year-Over-Year Price Growth: 14.69%
Year-Over-Year Inventory Growth: -25.93%
Median Days on Market Until Pending: 27
Located on the outskirts of the larger combined metro area of Los Angeles, Ventura is an ideal location for many who are looking to live farther from the dense parts of Los Angeles County. The Ventura metro area, which includes cities such as Ventura, Oxnard and Thousand Oaks, offers more space at a lower median price than the Los Angeles area comprised of Los Angeles County and Orange County, which had a median price of $726,501 in November.
The pool of available homes has shrunk significantly in Ventura year over year — by nearly 26% in December — which means new buyers to the market should prepare for more competition. However, the median days a property is on market until it is marked pending on Zillow was 27 in December, which may mean a bit less of a cutthroat buyer environment than other housing markets right now.
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The Top Housing Markets in the U.S. originally appeared on usnews.com
