According to a recent report by the real estate information company Zillow, Dallas, Denver and Seattle are the three hottest housing markets to watch in 2016. Home prices in these three cities — all of which are considered “tech towns” — are expected to rise steadily in 2016.
Of course, this should come as no surprise to anyone who follows real estate headlines (or HBI’s news blog). We’ve been reporting on these red-hot housing markets for months now. For instance, our readers might recall that home prices in Dallas and Denver returned to pre-housing-crisis peaks way back in 2013, and have been rising steadily since then.
Zillow’s Hot List: 10 Markets to Watch in 2016
To determine which housing markets would be sizzling in 2016, Zillow’s economic team examined home price trends, job market strength, and income growth among local residents. They then created a list of the top ten housing markets to watch in 2016, based on the above factors.
Zillow’s Top 10 Housing Markets for 2016:
- Denver, Colo.
- Seattle, Wash.
- Dallas-Fort Worth, Texas
- Richmond, Va.
- Boise, Idaho
- Ogden, Utah
- Salt Lake City, Utah
- Omaha, Neb.
- Sacramento, Calif.
- Portland, Ore.
So why have Denver, Seattle and Dallas-Forth Worth appeared on so many of these “hot lists” lately? What makes them the darlings of housing analysts and economists? Here’s an in-depth look at current and past real estate trends in these hot markets.
Denver: Mile-High City With Home Prices to Match?
Home prices in the Denver metro area skyrocketed in 2015, and they’re still following an upward trajectory. According to the latest release of the S&P/Case-Shiller Home Price Index (published on January 26, 2016), house values in Denver have hit yet another all-time high. That means house values have never been higher than they are right now. Prices in the Mile-High City rose by double digits over the last year or so.
Inventory is tight in the Denver real estate market. There simply aren’t enough homes listed for sale to meet demand, and this imbalance will likely push home prices even higher in 2016. A lot of folks are moving to this metro area from other states, but residential construction hasn’t kept pace. As a result, the Denver housing market could be a hot spot for appreciation in 2016.
Seattle Another Housing Market to Watch in 2016
Last fall, Seattle was ranked #4 on the Urban Land Institute’s list of markets to watch in 2016. And the city now appears on a similar list created by Zillow. So why is everyone clamoring about the Seattle housing market in 2016? What makes it such a frequent entrant on these lists? Once again, inventory is a major factor.
According to Realtor.com, the number of homes listed for sale in Seattle has declined by 30% over the last year or so. Meanwhile, the city’s population is growing steadily. In 2014, Seattle was the fastest-growing city in America by Census Bureau estimates. They’re coming for jobs, in many cases. After all, the city boasts an unemployment rate well below the national average.
It’s that supply-and-demand thing again. There are plenty of home buyers in the market to buy a home, but not enough homes available. This will make Seattle one of the hottest housing markets in 2016, by Zillow’s estimate.
Dallas Cooling Down, But Still Hot
What can we say about the Dallas real estate market we haven’t said before (like a month ago)? It’s another one of those metro areas with low unemployment and a high influx of workers. Translation: The “Big D” is getting bigger. But, once again, there aren’t enough homes on the market to meet demand.
Home price appreciation in Dallas could slow down a bit in 2016. Zillow predicts a gain of 5.6% over the next 12 months, compared to a whopping 16% over the last 12 months. So a market cool-down could be on the horizon. But 5.6% is still well above the national forecast for year-over-year price growth, and that makes Dallas another hot housing market to watch in 2016.