Austin is no longer Zillow's hottest housing market in 2022
Zillow has released its rankings for the top 10 hottest housing markets in the United States.
TAMPA, Fla. (WFLA) – Zillow has released its rankings for the top 10 hottest housing markets in the United States and Austin is no longer #1.
According to the Zillow study, the housing market in 2022 is going to stay hot, and Florida's heat is coming from more than just the sun. Three Florida cities are in the top 10.
Austin has been previously ranked by Zillow as the hottest housing market...but it slipped for 2022 by several spots.
Zillow ranked Tampa as the hottest housing market for the year, expecting it to top the list as a result of its relative affordability and high job growth, according to its 2022 forecast.
Here are the top 10 markets in the U.S. for 2022:
- Tampa, Fla.
- Jacksonville, Fla.
- Raleigh, N.C.
- San Antonio, Texas
- Charlotte, N.C.
- Nashville, Tenn.
- Atlanta, Ga.
- Phoenix, Ariz.
- Orlando, Fla.
- Austin, Texas
The real estate company said markets in the Sun Belt have "historically not been particularly sensitive to rising mortgage interest rates or a slowing stock market."
As a result of shifting demographics and continuing inflation, the price for monthly rent and monthly mortgages has risen across the country. In hotter housing markets, it's even more noticeable.
In 2022, Zillow said, the hottest markets will be "buoyed by a combination of strong forecasted home value growth, strong economic fundamentals including high job growth, fast-moving inventory and plentiful likely buyers."
While values are going up and job growth continues, "restrictive supply overall" is heating up the market. Basically, there aren't enough homes available to sell and meet the demand of the number of homebuyers looking for somewhere to live.
The way Zillow described it, there are "fewer sellers willing to sell, fewer homes built by builders" but "sky-high demand."
Zillow said the largest risk for housing markets in 2022 will be increased interest rates, expected to make home loans more expensive for new buyers. In the highest-priced markets, Zillow expects the higher interest rates to increase the amount of competition for lower-priced homes and make the available housing inventory more restricted.
The interest rate increases are something forecasted by the U.S. Federal Reserve to deal with inflationary pressures. The U.S. central bank doubled the speed of its expected tapering off of stimulus spending to assist with decreasing inflation over 2022.
The change in interest rates will have an impact on mortgages and other loans, with three planned rate increases over the next year. As more of the younger generation gets to an age where they're buying homes and inventory remains low, the competition for existing homes will spike along with demand.
The increased demand, along with homebuilding unable to keep up due to material shortages caused by supply chain issues, means that inventory will likely remain low in the foreseeable future.
The study said the two big active demographic groups in the housing market are baby boomers and millennials.
"The boomer tide in the for-sale housing market is expected to continue to rise for at least the next eight years; younger millennials will be hitting first-time home-buying age at about the same time, meaning the 2020s will be a period of sustained underlying demand in the housing market," according to the study.
For now, all housing costs are up, from rent to mortgages, alongside inflation and fuel prices. While Tampa's housing market shows no signs of cooling down, there are some indications that rental prices will stabilize after months of constant growth.
Emma Pardo is a realtor with the real estate company Compass. She said Tampa's housing market is hot because it's affordable, has a strong economy, job growth, development and desirable weather, just to name a few reasons.
"Of course, we have winning sports teams, which put a spotlight on Tampa," Pardo said. "For what you get for your dollar, Tampa really outweighs a lot of other areas of this country."
Pardo tells WFLA that almost 113,000 homes were sold in Tampa Bay in 2021, compared to only a little more than 96,000 in 2017.
"We're in a strong seller's market now, which means the demand far outweighs the supply," Pardo said. "People are moving here from different parts of the country because of COVID-19, it's more open."