8 Best Real Estate Markets In 2021
Lauren Bowling8-minute read
March 25, 2021
Whether buying a primary residence or an investment property, 2021 could be the year to resume your housing search. With the end of the pandemic on the horizon, price surges and inventory shortages should begin to stabilize this year. Coupled with the dramatic increase of permanent remote work opportunities, new locations are primed to be named the next hotspot real estate markets in post-COVID America.
COVID-19’s effect on the 2020 housing markets had a surprising outcome: nationwide shortages that led to large increases in home value, even beyond pricey (and formerly competitive) metro areas like San Francisco, New York City, and Los Angeles. Now that we know many areas of the workforce can be successful remotely, residents may want to plant roots in places where their money goes further, where the weather (and traffic) is better, and where they can still experience the best city life has to offer. Why pay city prices when you no longer need to live in the city to work? Industry analysts are calling the 2021 real estate market growth the “Sunbelt Surge” because southern locations with mild weather are rapidly increasing in popularity. Austin, Texas is expected to outperform the national margin by the widest gap in terms of home value growth.
In addition to the locations listed below, look for other small-scale metro areas to boom in 2021 such as state capitals and tourist destinations.
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What Makes An Area The “Best” Real Estate Market?
Below is a list of cities that top the list for best real estate markets in 2021, for both buyers and investors. The cities below are making headlines as being “hot” markets because the rise in home values outperformed both national averages and analyst expectations last year. Rapidly rising home values mean that if you buy (or invest) in one of these areas, your property value and subsequent home equity should rise too as the city’s population continues to grow.
But that isn’t all; while “best” is a subjective term, for us at Rocket Mortgage®, a great place to buy a home needs to have three things: affordability, job opportunities and fun things to do. (Great weather doesn’t hurt, either!) The cities below aren’t ranked, but they do fulfill all three requirements.
And while current market trends are heavily impacted by the effects of the COVID-19 higher-than-average prices and shorter-than-average time on market nationwide, these cities are still some of the best for buyers due to steady economic and population growth, even amid the current situation.
Best Real Estate Markets in 2021
1. Austin, Texas (Metro Area)
- Median listing price: $365,000
- Time on market: 33 days
- Home value increase (over pre-pandemic levels): 4%
While Austin certainly isn’t as cosmopolitan as New York, San Francisco, or Los Angeles, it does have all of the “big city” amenities any buyer could want plus warm weather to boot. Austin is also becoming a Southern hub for large tech companies such as Oracle, Google and Tesla; in January 2020 Austin was the second-fastest-growing Metro area for jobs in the country.
While the median home value is over $300,000, the median list price for an Austin home isn’t much above the national median ($320,000 in 2020, according to The Mortgage Reports). In fact, there are still many single-family home options for under $300,000 in the Austin Metro Area. Between affordability and job growth, analysts predict Austin will continue to be a top market in 2021 and beyond based on population growth alone; Census Bureau data shows from 2010-2019 Austin was the fastest growing metro area in the country. The city fell to #6 in growth in 2020, but is still experiencing record expansion, with the Austin Housing and Planning Department expecting the metro area to grow by 2% year over year until 2050.
2. Tampa, Florida
- Median listing price: $297,500 (for single-family home)
- Time on market: 12 days
- Home value increase (over pre-pandemic levels): 4%
Pretty much any city in Florida is a good bet if you want to achieve homeownership at a price below the national average (Orlando, Miami and Jacksonville are also experiencing strong market activity in 2021), but Tampa is at the top of our list due to the amount of job growth the Tampa Metro Area achieved last year. Even amid COVID-19, the Tampa Bay area managed to add over 30,000 jobs last year, which fuels the large demand for housing.
The Tampa Bay area also boasts close proximity to the beach and year-round warm weather (with temperatures in the 60s and 70s even throughout the winter) and many tourist attractions like Busch Gardens, a zoo, an aquarium and the Tampa Riverwalk.
Florida also has zero state income tax, which means residents get to keep more of their hard-earned money each year.
3. Raleigh-Durham, North Carolina
- Median listing price: $298,500
- Time on market: 23 days
- Home value increase (over pre-pandemic levels): 4%
Nearly 1.4 million people call the “Triangle” area home, with population growth still expected to rise in the next 15 years. Real estate reports rank Raleigh-Durham as #1 for housing growth, meaning they’re building more new homes in this region than anywhere else.
Because of attractive, high-paying jobs in tech, science and research, Raleigh-Durham is a very attractive market for investors who want to tackle the high-end rental market. Whether buying or investing, Raleigh is also one of the few places in the country right now where home supply exceeds demand, meaning buyers can still acquire a home without high competition or a bidding war.
And for those who don’t want to miss out on big-city amenities and things to do, Raleigh is the hub of the state of North Carolina for the arts and sciences, with an arts, science, history and children’s museum. Nature lovers can access the William B. Umstead State Park and the Mountains-to-Sea Trail from the Raleigh metro area as well.
4. Nashville, Tennessee (Metro Area)
- Median listing price: $344,920
- Time on market: 26 days
- Home value increase (over pre-pandemic levels):7%
Nashville has ranked in the top 10 metro areas for jobs and economic growth over the last few years and is best known for having jobs in a diverse array of industries from health care to music and tourism to manufacturing. In early 2020, Nashville was ranked second by The Wall Street Journal for metro area job growth (only behind Austin, Texas), and #1 in the country for lowest unemployment rate.
In addition to job opportunities, Nashville is known for its great restaurants, entertainment, music scene and nightlife, although the cost of living is higher in Nashville than other metro areas like Atlanta, Georgia and Charlotte, North Carolina. Still, for young professionals making a median income of at least $85,000, homeownership – and a comfortable lifestyle – is within reach, making it a rarity among major metro areas with exciting amenities. Nashville is also one of the fastest-growing areas for young professionals, making the city primed for real estate investors looking to enter the rental market.
5. Denver, Colorado
- Median listing price: $457,000
- Time on market: 27 days
- Home value increase (over pre-pandemic levels): 13%
With the legalization of cannabis, the city of Denver once experienced a large population boom, and still continues to grow almost 2% year over year. But legal marijuana isn’t the only reason Denver is so popular, there’s also the year-round great weather. Whether you hike or ski, Denver is the perfect place for residents who want to spend most of their time outdoors.
While the real estate market is exceptionally competitive everywhere during the pandemic, Denver home prices recently reached record highs in February 2021 due in large part to the lowest inventory the city has ever seen. This inventory shortage is one of the reasons why Denver will beat the national margin for home value growth, even though COVID-19 severely impacted the city’s job growth and employment rates.
But if you’re willing to wait in a rental, are working from home permanently, or feel able to compete in a hot market, Denver is well worth the move, ranking at the top of several “best cities to live in” lists each year.
6. Cleveland, Ohio
- Average list price: $334,810
- Time on market: 44 days
- Home value increase (over pre-pandemic levels):5%
Low inventory is currently pushing the median list prices of Cleveland homes up over the $300,000 mark, but if you look at the data, Cleveland is still incredibly affordable: the average sales price is much lower and closer to $180,000. With more companies going remote, Cleveland’s affordability may appeal to first-time home buyers.
There’s a little bit of everything in Cleveland: health care (The Cleveland Clinic), nature (Cleveland Metroparks Nature Reserve) and Culture (Playhouse Square, the second-largest performing arts center behind New York City’s Lincoln Center.) Sport lovers in particular may enjoy Cleveland, which is one of the few metro areas to boast a major baseball, basketball, football, hockey and soccer team.
Jobs, income and population are all growing in Cleveland, but most importantly for real estate investors is that over 50% of Cleveland’s population are renters. With affordable home prices, novice and experienced investors alike would see success in Ohio, but with a 20%+ jump over 2020 home values, those who want to buy should do so before the end of 2021 to take advantage of growing home equity.
7. Phoenix, Arizona
- Median listing price: $360,000
- Time on market: 43 days
- Home value increase (over pre-pandemic levels): 2%
Phoenix home values have grown an astonishing amount over the last year – over $100,000 in average value growth from January 2020 ($350,000) to January 2021 ($457,000). This increase is largely due to demand from a sudden influx of buyers: remote workers and retirees who want more space for the money. While home prices are slightly above the national average, data from Payscale shows the cost of living in Phoenix is 5% below average, meaning your dollars will go further.
A six-figure home price jump is enough to put Phoenix on the list of “hottest” real estate markets, but the largest town in Arizona has a lot to offer residents. Between increasing tech jobs (Amazon, Uber, Shutterfly and Yelp have offices in Phoenix), over 200 golf courses (the most popular sport during COVID-19), and restaurants and nightlife, it’s easy to see why many move to Phoenix.
8. Jacksonville, Florida
- Median listing price: $235,000
- Time on market: 54 days
- Home value increase (over pre-pandemic levels): 5%
Jacksonville, Florida may not ring any bells when you think of “major metro area,” but Jacksonville is actually one of the fastest-growing economic areas in the country, with almost one million residents in the metro area. Jacksonville’s growth is attributed to its strong job growth, as employment opportunities grew almost 2% in the Jacksonville area last year.
Jacksonville is also incredibly affordable; Forbes reports the current Jacksonville cost of living at 7% below the national average, and the median list price of properties well below national averages too. In this area, the average price per square foot on a three-bedroom, two-bath single family home is a comfy $139 per square foot.
Home Buying In One Of The Best Real Estate Markets in Recent History
With the onset of the COVID-19 pandemic in 2020, it’s easy to assume most would-be home buyers put their plans on pause last year. Global health crisis or not, many Americans still need to move and the same can be said for 2021 and beyond. In a way, this is comforting to know: there will always be home buyers and home sellers even in the most unprecedented of times.
Although prices and inventory may stabilize somewhat in the months ahead, industry analysts do predict the current seller’s market to extend into early 2022, which means today’s buyers could contend with a variety of stressful factors such as bidding wars, throwing out contract contingencies, and missing out on their first-choice home. Because of this, first-time buyers especially need to educate themselves on the nuances of how to buy a home in a hot, competitive market.
One of the first (and easiest!) steps to start working toward homeownership is to apply for a mortgage. Getting prequalified allows buyers to begin working with a real estate agent ASAP, and to be able to move quickly in case you do happen upon the house of your dreams.
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