ULI Ranks Top Real Estate Markets to Watch in 2016; Top Two in Texas

The Urban Land Institute (ULI) recently published its Emerging Trends in Real Estate®, an annual report that reveals real estate trends and forecasts based on the views of numerous housing experts. It’s always an exciting time at the Home Buying Institute when this report (a book, really) comes out, because it’s usually full of well-researched insight. And this latest issue doesn’t disappoint.

Among other things, the Emerging Trends report provides a list of the top U.S. real estate markets to watch in 2016. Two Texas housing markets — Dallas-Forth Worth and Austin — took the top two spots on their list. Here’s a look at the other real estate markets that made the list, and what the rankings mean.

Top 10 Real Estate Markets to Watch in 2016

The ULI report ranked the top 75 U.S. real estate markets to watch in 2016. The top 10 are shown below. Rankings were based on a combination of actual market performance, and the views of leading real estate executives as revealed through surveys.

Individual real estate markets are ranked based on their performance (and their expected performance) in three primary areas: investment, development, and home building.

According to ULI, the top 10 markets to watch in 2016 are:

  1. Dallas / Forth Worth, TX
  2. Austin, TX
  3. Charlotte, NC
  4. Seattle, WA
  5. Atlanta, GA
  6. Denver, CO
  7. Nashville, TN
  8. San Francisco, CA
  9. Portland, OR
  10. Los Angeles, CA

Among other things, this list shows us that real estate markets in Texas continue to outperform the nation. This is a trend that could continue into 2016. The major metro areas in Texas remain attractive to young, upwardly mobile Americans, partly due to their strong job markets. (That’s what attracted me to Austin when I was a young, upwardly mobile American.) This drives demand for housing and bolsters home prices.

Read: Austin one of the most stable markets

According to the Urban Land Institute, the new report “reveals a new number-one market as Dallas/Fort Worth climbed four spots from last year’s survey to take the top spot, leapfrogging state rival Austin in the process, which remains in the number-two spot.”

Houston was an exception to the rise of Texas housing markets. The city dropped from number one to number 30 in the latest survey. Concerns regarding the fall in oil prices, combined with the current level of new development in Houston, “gave survey respondents pause for 2016.”

ULI top 20 markets
ULI’s Top 20 Markets to Watch in 2016

Real estate markets in Atlanta, Nashville, Oregon and Portland are new entrants into the top ten for 2016. These cities have climbed the ranks due to having strong housing fundamentals and growth.

The population of Charlotte, North Carolina — #3 in the rankings — has grown steadily over the last few years. This is largely due to the strong economy and quality of life offered by the city. Home prices in the Charlotte real estate market rose steadily during 2015, and they are expected to continue rising in 2016 (though possibly at a more modest pace).

Home prices in Seattle — #4 in the rankings — have also risen sharply over the last year or so. According to Zillow, house values in the Seattle real estate market rose by more than 10% from September 2014 – September 2015. Looking forward, the company’s economists expect prices to rise by 6.4% through the fall of 2016.

And what can we say about Denver we haven’t said before? Denver and Nashville — two of the cities in ULI’s top ten markets to watch — both hit new price peaks earlier this year. That means house values in those two metro areas are higher now than ever before.

Read: Dallas and Denver lead home price index

The report also shard a favorable outlook for the U.S. real estate market as a whole: “Last year, we commented that housing was ready to step off the roller coaster. It appears that in a majority of markets, housing has indeed stabilized and is poised to begin a sustained upward trajectory.”

Disclaimer: This article contains third-party data and commentary that are deemed reliable but not guaranteed. We make no claims or assertions about 2016 housing conditions in these or any other cities.