Zillow released its list of the hottest housing markets Tuesday, with Tampa, Fla., and Jacksonville, Fla., leading the pack.
Last year’s hottest market, Austin, Texas, fell to No. 10 this year, and Zillow predicts that due to less favorable demographic trends and fewer new jobs, the following cities will be the coolest markets:
- New York
- San Francisco
- San Jose, Calif.
Similarly to other market experts, Zillow predicts the housing market will remain strong overall, due to a sustained high demand carrying over from 2021.
The top five hottest markets this year were chosen based on strong forecasted home value growth, job growth, inventory, and eager buyers.
These states also aren’t sensitive to rising mortgage rates, according to Zillow, or a slow stock market.
Here are Zillow’s top five markets:
- Tampa, Fla.
- Jacksonville, Fla.
- Raleigh, N.C.
- San Antonio
- Charlotte, N.C.
According to Zillow, even the coolest markets should perform well, just not as strongly as the top picks.
Predictions were based on Zillow’s published Home Value Index and Home Value Forecast, plus data from the U.S. Bureau of Labor Statistics.
Most market experts agree sellers will continue to have the upper hand in 2022, with sustained competition.
However, experts also agree that there’s still plenty of opportunity for interested buyers to find their dream home.
Although markets in the Sun Belt are red hot, others may see a slightly more notable slowdown as mortgage rates rise and supply and demand fight for a balance.
In Michigan, for example, new construction is on the rise. Realtors in the state agree residents are experiencing buyer fatigue from the stiff competition, and combined with rising rates, a buyer with the right offer will be the big winner.
Real estate agents and lending experts agree that when competition is high, the best offer presentation is what will get a prospective buyer into the right home.
Homeowners living in high-demand cities have other options, too, according to experts. With increasing home values, borrowers can use a cash-out refinance to make home improvements or pay down debts.
A cash-out refinance allows borrowers to tap into equity in their home, and with high home values, there are near-record amounts of equity available.
Experts expect that when rates begin to rise, a “buying frenzy” may occur as buyers rush to purchase or refinance while rates remain relatively low.
Fortunately, experts say rates should remain historically favorable this year as the market seeks a balance, but they still recommend acting sooner rather than later.