TABLE OF CONTENTS
The Covid-19 pandemic has reshaped our lives in ways that directly impact the economy. It has led to the emergence of a different perspective in terms of our lifestyle, work environments, and interaction with the world around us. The lifestyle changes triggered by the pandemic have accelerated some emerging trends in the US Real Estate Market in 2021.
What are the factors that are driving some of these changes?
The rapid shift to remote work has brought about significant changes in office spaces. There is an increased demand for housing properties in the suburbs, focusing on health and wellness. The heart of the city that drew the largest number of people is slowly taking a temporary backseat as people are now looking for lower-density environments. The retail sector also witnessed significant changes owing to the novel coronavirus. Last year's encounter with one of the most widespread pandemic greatly impacted the population's affordability, thus predicting a fall of 5-10% in real estate prices in 2021.
The pandemic boosted some of the already emerging trends in the US real estate market, while some existing trends witnessed a sudden halt. Based on the PwC report on the Emerging Trends in Real Estate in 2021, some of these changes are here to stay in the foreseeable future for at least the next 3 to 5 years. However, some will undergo definite changes, depending on how former high impact areas such as large cities adapt to people's changed lifestyle and expectations.
After a careful study and analysis of the existing and upcoming trends, we have compiled a list of Top 8 US Real Estate Markets in 2021 that will scale high on the demand meter.
Top 8 US Real Estate Markets In 2021
Raleigh, North Carolina
With a population of nearly 1.4 million, Raleigh is the second-largest city in North Carolina, where 27% of the population is between the ages of 20 to 39. The population is diverse, with a growing percentage of African-Americans and Hispanics. Even on the job market, Raleigh outranks cities such as San Francisco and Boston when it comes to STEM job creations.
It has been ranked as the No. 1 large market for housing construction growth in 2021 and is becoming a buyer's market.
What makes Raleigh a more affordable housing option?
The residential use covers more than 70% of Raleigh's land, thus making it more affordable than Austin, Atlanta, or Charlotte and an attractive renter's market. The median listing price for a home in Raleigh is $320,000.
When it comes to the housing market for 2021, Sacramento tops the list. The Covid-19 pandemic has directly impacted the boost in demand for housing in this area. Given the remote working culture, many potential buyers are choosing Sacramento over the San Francisco Bay Area.
What are the factors that have led to this increased demand in Sacramento?
The area has a strong schooling system, and it draws a diverse crowd of homebuyers. Based on predictions by Realtor.com, there will be an increase of 17% in the number of houses sold from last year, and average home prices in Sacramento are expected to go up by 7.4% compared to 2020. The median home price in Sacramento is $554,050.
Based on Zillow's Home-Price Expectations Survey, Austin is expected to be one of the hottest real estate markets in 2021 again. The factors that drive the housing growth in Austin mostly revolve around the massive influx of tech companies and workers. The area is primarily a Sunbelt destination, which also adds to the increased demand for housing properties in Austin.
Last year's survey predicted Austin to be the hottest market in 2020, and it proved to be true given that the median list price for homes in the Austin metropolitan area increased by 23.6%. Based on a recent report by the Austin Board of Realtors, Austin's median home price is $365,000.
Charlotte, North Carolina
Based on Realtor.com, Charlotte is expected to witness a sales growth of 13.8% in 2021 compared to last year and a combined growth of sales and home prices of 19%. Being the most populated city in the state, Charlotte has a diverse population and is one of the fastest-growing metro areas in the US.
Though the unemployment rate was down to 6% in October 2020, Charlotte has shown the fastest recovery signs in the employment sectors. The median home price in Charlotte is $368,819.
With access to the mountains and the beach, Charlotte has the best of both worlds and something for everybody. The weather and the excellent schooling system draws a diverse range of buyers in terms of age group, making it one of the most attractive markets for real estate investors who are targeting millennials.
Based on three primary factors - growth in the property value, activity in real estate, and the local economy, Nashville has been ranked in the top 4 real estate markets of the US by Wallethub.
Forbes has also ranked Nashville as the top 14th place for job growth. With a population of nearly 1.9 million, it is considered one of the best cities for young professionals in the US. According to Zillow, the median home price in Nashville stands at $298,000.
With favorable weather conditions and greater diversity, Nashville is one of the top cities that people migrate to from core urban areas for better opportunities and affordable living.
With a median home price of $412,260, Phoenix is expected to witness a sales growth of 11.4% in 2021 and a combined sales and price growth of 18.4%. It is the right place for those looking for all the amenities metropolitan cities have to offer but without the hullabaloo and traffic. It is also an area with promising employment opportunities in both the public and private sectors.
This makes it one of the top choices for homebuyers, especially after the pandemic when people are shifting to areas with lesser density.
Being the 3rd largest city in Florida, Tampa has a steady job growth leading to a significant rise in the demand for housing. Tampa is expected to witness a sales growth of 8.7% and a combined sales and price growth of 16.2% in 2021
Based on Kiplinger's housing affordability report, Tampa has an affordability index of 5/10. The mid-range explains why Tampa is one of the preferred markets in the US Real Estate for renters. The median home price in Tampa is $299,900.
Riverside is one of the top markets, which draws a crowd of homebuyers seeking the temperate weather of Southern California but a much lower price than offered in Los Angeles. The enviably short distance to the beach, mountains, and desert makes it an excellent location for outdoor lovers.
With a median home price of $475,050, Riverside is expected to witness a sales growth of 12.2% and a combined sales and price growth of 17.9% in 2021.
As the pandemic reshuffled our business perspectives and approaches last year, the real estate industry has a chance to reshape people's work and living environment. 2021 is the year that will visibly acknowledge the new trends that have spawned during Covid-19 and witness the rapid evolution of the real estate market trends.