As 2020 nears its end, one of the more interesting developments to observe was how housing markets reacted to the events of this tumultuous year, namely, the Covid-19 pandemic. Rather than simply damaging or dampening housing activity, the pandemic’s impact has been much more complex. Combined with historically low interest rates — itself a response to the pandemic’s initial impact back in March — many housing markets in the United States have been very hot in 2020.
Utilizing housing data from Zillow, including one-year, two-year and five-year changes in home values, as well as data from Redfin, including number of home sales, available inventory, percentage of homes sold that were off the market within two weeks, we have zeroed in on some of the top housing markets to watch in 2021. The study revealed that traditional assumptions made about certain housing markets, like San Francisco and New York, have to change as many cities experienced slow sales and home value growth. Meanwhile, some unusual suspects have seen a marked uptick in activity and are poised to continue into next year. Read on to find out the top housing markets to watch in 2021.
1. Boise, Idaho
The capital of Idaho has been experiencing big growth in its population and its home values in recent years. From 2010 to 2020, Boise’s population rose by about 12%, from 209,578 people to 234,576. From October 2015 to October 2020, home values rose by 75% on average, with the value of a typical home in Boise up to $379,161 from $216,607 five years ago. In just the last year alone, the average Boise home value rose by $50,000, from $329,026 in October 2019 to where it stands now.
Boise’s housing inventory — the total number of homes available for sale — has been severely depleted due to heavy market activity. Last October, the Boise metro area had 3,357 homes available for sale. A year later, that number had plummeted to 486 homes available for sale as of October 2020 — a decline of 85.5%. Homes are going fast in the Boise metro area, as the percentage of homes that were off the market within two weeks rose from 46.7% in October 2019 to 67.8% in October 2020. Back in October 2015, only 5.8% of homes were sold and off the market within two weeks.
2. Tacoma, Washington
Tacoma is but one of several cities in Washington state that made this list of top housing markets in watch in 2021. Houses are going fast in the Tacoma metro area, with 73.6% of homes sold in October 2020 going off the market within just two weeks. Last year, that figure was only 51.3% and, in October 2018, it was 41.1%. As such, for-sale inventory in the Tacoma area has been dropping steadily as home sales have ticked up. Inventory fell from 2,575 homes available in October 2018 to 1,855 homes in October 2019, and then fell again, to 1,008 homes for sale in October 2020. Meanwhile, home values have been increasing like clockwork over the years, with the typical Tacoma home value rising from $335,018 last October, to $384,217 as of October 2020.
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3. Killeen, Texas
Modern Texas as well as the Texas of the Old West both have their fair share of boomtowns, and Killeen is one of them. Since 2010, its population has grown by about 20%, from 128,980 people to 153,973 in 2020. Home values have steadily increased in Killeen, but the real story is the number and pace of sales. Last year, there were 1,186 homes available for sale in the Killeen metro area in October 2019. Fast-forward to October 2020 and available inventory is now down to just 450 homes for sale. This is because homes are going fast. Last October, 47.2% of homes sold were off the market within two weeks. A year later, it was 66.5% of homes sold were off the market in two weeks.
4. Spokane, Washington
Spokane is in eastern Washington state, far from Seattle and Tacoma, but has been experiencing its own surge in housing market activity. Spokane home values have grown robustly, with the value of a typical home rising by 14.4% in just one year, from $249,055 in October 2019, up to $284,800 in October 2020. Homes in the Spokane metro area are selling quickly. In October 2020, more than two-thirds of homes sold were taken off the market with two weeks, while in October 2019 it was less than half of homes. As a result, for-sale inventory in Spokane is very tight, having dropped from 1,411 available homes in October 2019, down to 694 homes in October 2020, for a decline of over 50% in a year.
5. Cleveland, Ohio
Despite suffering from population loss and a decline in industry like much of the “Rust Belt,” Cleveland still has a lot going for it. And, in a time when remote-working is more feasible than ever, the affordability of Cleveland’s housing market is certainly appealing. Over the last year especially, activity has heated up in the Cleveland housing market. Available for-sale inventory stood at 8,364 homes in October 2019, barely changed from October 2018’s available inventory of 8,724 homes. But in October 2020, Cleveland’s inventory was down to 4,876 homes available, a drop of over 40% in only a year. Related to this is the sharp rise in the number of houses that were sold off the market within two weeks. That percentage stood at 18.4% of homes in October 2019, but by October 2020, more than 40% of homes were sold and off the market within two weeks.
6. Buffalo, New York
It may come as a surprise to see Buffalo, a notable city within America’s “Rust Belt”, on a list of the top housing markets to watch in 2021. However, Buffalo’s housing market has been showing some interesting trends. While Buffalo’s population has declined since 2010, home values have been steadily rising over the years while still being affordable for first-time homebuyers. The typical home value in Buffalo rose by almost 11% over the last year, from $145,604 in October 2019 to $161,075 in October 2020. Meanwhile, the number of available homes for sale in the Buffalo metro area dropped big since last year. In October 2019, there were 2,451 homes for sale in the Buffalo area; by October 2020, available inventory had been cut in half, down to 1,208 homes for sale. Equally impressive, the percentage of homes that were sold within two weeks rose from 43.8% in October 2019 to 64.8% in October 2020.
7. Seattle, Washington
Seattle has been on a bit of a hot streak in terms of growth and housing market, although the latter briefly faltered for about a year. In 2010, Seattle’s population numbered 610,639 people; by 2020, the city’s population had reached 783,137, an increase of 28.2% in 10 years. Home values in Seattle ballooned, rising from an average of $525,934 in October 2015 to $743,969 in October 2018, before a slowdown set in and brought the typical home value down to $708,604 in October 2019. Since then, values grew by a solid 10.6%, reaching $783,969 as of October 2020.
Homes are selling fast in the Seattle metro area. Over two-thirds of homes for sale (67.2%) were off the market within two weeks in October 2020, up from only 45.9% in October 2019. The uptick in sales has caused the available inventory to fall from 6,541 homes for sale in October 2019, down to 4,577 in October 2020, a decline of 30%.
8. Indianapolis, Indiana
Here’s another Midwest city whose housing market is displaying marked vitality. The value of a typical Indianapolis home rose by 10.5% in just one year, from $150,481 in October 2019 to $161,075 in October 2020. At the same time, homes have been flying off the shelf in the Indianapolis metro area. In October 2019, less than half of homes sold were off the market within two weeks; in October 2020, however, 65% of homes sold were off the market in two weeks. As a result, Indianapolis housing inventory is down a lot, from 6,315 homes available for sale in October 2019, down to 3,247 available in October 2020.
9. Stockton, California
Northern California has some housing markets showing very lively signs of activity. Stockton is one of them, where homes values are up by more than 50% since 2015 and a population that’s up by 8.4% since 2010. In 2020, homes in the Stockton metro area have been selling like hotcakes. Last year, inventory stood at 1,555 homes available for sale in October 2019. A year later, available inventory was down to just 611 homes in October 2020. Additionally, houses are selling faster than ever before. In October 2020, 66.3% of homes sold were off the market within two weeks, while in October 2019, that figure was only 37.3%.
10. Bridgeport, Connecticut
Though the city saw its population decline by nearly 2,000 people since 2010, the Bridgeport metro is showing unusually positive signs when it comes to its housing market. Home values have appreciated well, with the typical Bridgeport home value rising from $202,898 in October 2019 to $231,198, which is growth of 13.9% in just one year. Home sales have certainly picked up in the Bridgeport metro area, but slow-and-steady is the name of the game. For instance, only 13% of homes sold were off the market within two weeks, so they’re not selling particularly fast. However, the number of home sales has risen substantially, from 1,055 sold in October 2019 to 1,807 sold in October 2020. This has helped drive down available inventory, from 6,016 homes for sale in the Bridgeport area last October, down to 4,744 homes for sale in October 2020.
11. Grand Rapids, Michigan
Located in Western Michigan, just east of Lake Michigan, Grand Rapids is one of the fastest growing cities in the Midwest and has a housing market that’s been taking off recently. Home values have grown at a healthy rate, with the value of a typical Grand Rapids home rising 11.6% over the last year, from $180,798 in October 2019 to $201,705 in October 2020. As home values have risen, so have the number of homes sold — from 1,464 sold in October 2019 to 1,658 sold in October 2020. In the Grand Rapids metro area, nearly 70% of homes sold were gone off the market within two weeks in October 2020, compared to 50.2% in October 2019 and 50.9% in October 2018. With homes going so fast in the Grand Rapids area, fewer homes are available for sale. Inventory is down by about half compared to last year, with 1,476 homes available for sale in October 2020 versus 2,847 homes in October 2019.
12. Richmond, Virginia
Richmond is another state capital with a hot housing market. Homes have been selling fast, with 65.6% of houses going off the market within two weeks in the Richmond metro area in October 2020, up from 48.9% in October 2019and 44.2% in October 2018. You can see the effects on the for-sale inventory, as the number of homes available fell from 3,743 for sale in October 2019, down to 1,803 for sale in October 2020, which means it dropped by more than half in one year. The number of home sales in the Richmond metro area rose markedly from 2019 to 2020, from 1,620 being sold in October 2019 to 2,011 sold in October 2020.
13. Sacramento, California
California’s capital has been the site of major population growth over the last 10 years, rising from 467,302 people in 2010 to 521,769 in 2020. Home values have risen precipitously as well, by over 50% in the last five years. From October 2018 to October 2019, the typical Sacramento home value rose by a modest 3.8%, from $329,822 to $342,207, but by a solid 10.6% from October 2019 to October 2020, reaching $378,368. Meanwhile, the number of home sales is up by nearly 21% since last year, from 2,856 home sales in October 2019 to 3,445 sales in October 2020. Inventory has declined sharply as well, with the Sacramento metro area going from 5,497 homes for sale in October 2019, down to 3,093 for sale in October 2020.
14. Clarksville, Tennessee
Clarksville is the fifth-largest city in Tennessee and one of the fastest growing as well. In fact, its population has risen by 23.2% over the last 10 years, from 133,480 people in 2010 to 164,496 in 2020. Only five years ago, Clarksville was a fairly sleepy housing market, with only 292 home sales in October 2015. By October 2020, that figure had grown by 94.2% to 567 homes sold. Available inventory, meanwhile, has also fallen as home sales have soared. Last October, there were over 1,400 homes available for sale, but as of October 2020, there’s only 932 homes available. This is because homes are selling faster in 2020 than prior years: In October 2019, just over a quarter of homes sold (25.6%) were gone off the market within two weeks; in October 2020, however, this share of homes had grown to nearly half of all homes sold (47.4%).
15. Omaha, Nebraska
The Omaha housing market has a lot of potential going into 2021. There is plenty of activity, with sales of homes growing significantly from 2019 to 2020. In October 2019, there were 1,192 home sales in the Omaha metro area, and similar sales numbers in October 2018 (1,145) and in October 2015 (1,146). But in October 2020, the number of homes sold increased by nearly 18%, from 1,192 homes in October 2019 to 1,404 homes sold this year. With homes sales rising in the Omaha metro area, inventory has naturally declined: From 2,070 homes for sale in October 2019, down by almost half to 1,067 in October 2020. And these homes are going very fast. Last October, the share of homes sold within two weeks of going on the market was 48.3%. In October 2020, this share had grown to 71.6% of homes sold going off the market within two weeks.