Top 10 Real Estate Markets to Watch in 2016
Where are the next red-hot places for real estate?
we don’t actually have a crystal ball here, but we do have our chief economist, Jonathan Smoke. As part of the realtor.com 2016 Housing Forecast released on Wednesday, he homed in on the top 10 up-and-coming metropolitan markets in the country.
Smoke and his team took past trends and seasonal variations of housing and economic data for the 100 largest markets in the country and stuck them into a time machine, we mean a statistical model that predicts future values for home sales and prices. Then they identified the markets whose forecasted growth was equal to or better than the U.S. average. The resulting top 10 list is of the real estate markets that look the most bullish for the coming year. Get ready for a few surprises!
Many of the markets that have consistently made our “hot list” because of high demand from buyers and quick sales didn’t make the cut for 2016, because they are predicted to see slower price appreciation and even declining sales. Notably, they include the greater metro areas of San Francisco, Denver, and Dallas.
In addition, each of the markets on the list is in high demand, with 60% more listing page views than the U.S. overall and inventory that sells 16 days faster than the U.S. average. Surging demand in each market can be attributed to growing household formation, a prosperous job market, and low unemployment rates as well as large populations of key demographics. Older millennials (25 to 34 years old), younger Gen Xers (35 to 44 years old), and retirees (65 to 74 years old) will be driving home sales in 2016.
While these top markets have bright prospects in common, their underlying dynamics are different.
For the younger set, especially those with families, affordability emerges as key to growth, which favors the markets in the South and Midwest, he added.