The hottest housing market in 2019, will be that silicon city San Jose, according to Zillow, but the Dallas-Fort Worth area remains in the top 10, coming in at No. 7, according to the real estate and rental marketplace firm.
To find the hottest housing markets, Zillow looked for places where the firm expects home values and rents will outpace the nation in 2019, strong income growth, good job opportunities with low unemployment rates and a growing population.
San Jose has the lowest unemployment rate and the most jobs per person among the 50 largest U.S. metros, along with the highest home values and forecasted home-value appreciation. While other West Coast markets – including Zillow’s home base of Seattle – have slowed down, San Jose continues to see double-digit home value growth. It has led the country for home value appreciation, which it should do again during the early months of 2019, though the market is doubtlessly facing headwinds. For-sale inventory in San Jose has doubled in recent months, but remains tight. It also ranked highly for income growth, with the typical household income growing by 6.8 percent.
Five of the hottest markets are in the South, where housing is more affordable, drawing in new residents. Median home values in Jacksonville, for example, are one-sixth what they are in San Jose, and rents are about one-third the price. Orlando had the biggest population increase of the hottest housing markets, up 2.8 percent. Not on the list are either of the cities chosen by Amazon for HQ2. Along with the San Francisco Bay Area markets of San Jose and San Francisco, four metros (Atlanta, Dallas, Denver and Nashville) in the top 10 were finalist markets for Amazon’s HQ2, and have growing tech industries.
Fort Worth also received some Amazon attention, being chosen for AmazonAir expansion.
Zillow’s Top 10 Housing Markets for 2019
1. San Jose, Calif.
2. Orlando, Fl.
3. Denver, Colo.
4. Atlanta, Ga.
5. Minneapolis, Minn.
6. San Francisco, Calif.
7. Dallas-Fort Worth
8. Nashville, Tenn.
9. Jacksonville, Fl.
10. San Diego, Calif.
“When it comes to the country’s hottest housing markets, long-time leaders are hard to displace, but a number of up-and-comers are nipping at their heels. Silicon Valley’s white-hot jobs market has propelled the region’s housing market – which we expect to continue into the early months of 2019 – but there are some signs that the trend is away from the West Coast and toward the South and Southeast,” said Zillow senior economist Aaron Terrazas. “Affordability is attractive – for both young professionals and booming businesses, earning markets
Zillow used six variables to determine the hot market rankings: Zillow’s forecast for the change in the Zillow Home Value Indexi and Zillow Rent Indexii over the next 12 months, recent income and population growthiii, current unemployment ratesiv, and the number of job openings per person using data from Glassdoorv. Those six variables were then scaled for the 50 largest U.S. metros and combined to produce the top 10 list.