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BlogArrowReal Estate News & CommentaryArrowTop 50 Housing Markets for Home Price Appreciation and Sales Growth in 2021
Real Estate News & Commentary Dec 13, 2020

Top 50 Housing Markets for Home Price Appreciation and Sales Growth in 2021

BiggerPockets
Expertise: Real Estate Deal Analysis & Advice, Real Estate News & Commentary
30 Articles Written
Travel concept with red pushpin

When the holiday season passes and 2021 rolls in, homebuyers throughout the U.S. will begin searching for their next place to live. The tumultuousness of 2020 could certainly make next year harder to predict than ever. But nonetheless, Realtor.com has released its annual housing market forecast.

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The consensus? Millennial movers, relative affordability, and economic growth despite a pandemic have made state capitols and technology hubs the best and brightest markets in the coming year.

(PRNewsfoto/Realtor.com)

Top 10 Housing Markets of 2021

Out of the top 100 markets, the top 10 will see an average increase in home price of 6.9% (5.7% is the national average) and a year-over-year sales boost of 13.1%. These metros include:

  1. Sacramento, California
  2. San Jose, California
  3. Charlotte, North Carolina;
  4. Boise, Idaho
  5. Seattle, Washington
  6. Phoenix, Arizona
  7. Harrisburg, Pennsylvania
  8. Oxnard, California
  9. Denver, Colorado
  10. Riverside, California

Driven by a new remote economy and stable government jobs, most of these top markets are state capitols like Sacramento, California, or rising tech hubs like Charlotte, North Carolina, and Boise, Idaho.

Related: Remote Workers Are Relocating—Here’s How to Attract Them as Tenants

“This past year, we’ve all become more reliant on technology to work, learn, and maintain personal connections. The technology hubs that make this possible are thriving, as are their housing markets,” said Realtor.com’s Chief Economist Danielle Hale.

“Additionally, the relative stability of government jobs in the past year has driven home prices and sales in several state capitals to the top. Homebuyers, particularly younger first-time buyers, looking in one of these markets should expect rising prices and heavy competition. Meanwhile, sellers will remain in a position of power, but will find themselves on the other side of the bargaining table when buying their next home.”

The pandemic caused layoffs and business closures across the nation, but the switch to remote technology and increased reliance on software and other digital products that are keeping businesses running have made an already booming tech sector explode even more.

On top of that, the stability of government jobs during these times has made working outside of the private sector more lucrative, allowing for state capitols and Washington D.C. to see overall growth topping 10%.

Affordability Is Driving Homebuyers Outside of Traditional Giants

New York and San Francisco are typically the leaders of business and technology, but housing prices per square foot and the cost of living have appreciated so much in recent years that living there is less and less economical for fresh college graduates or older millennials looking to raise their families. Not when a few hours west in Harrisburg, Pennsylvania, they can get a larger home with stronger job growth at $122 per square foot versus New York where it’s $216.

Related: This Type of Home Is Selling Faster Than Ever

The contrast is even starker when comparing markets in California. Sacramento, Realtor.com’s number one ranked market in 2021, has a price per square foot of $284, a rising technology sector, and also happens to be the state capitol. On the other hand, in San Francisco, Silicon Valley has driven the price per square foot up to $679—more than double the price of Sacramento. Living there is starting to make less and less sense in a world where telecommuting is the norm for many.

As a result, millennials seem to be taking advantage of these well-priced markets while they can. While this cohort accounts for a national average of 13.5% of the marketshare, millennials make up 14.1% in these hubs.

“[W]hen it comes to millennials purchasing homes in the top 10, two trends are emerging. In half of this year’s top markets, including Charlotte, Boise, Phoenix, Harrisburg, and Riverside, millennials are already homeowners and expected to make the majority of the home purchases that drive home price growth and sales,” the report noted.

“In the other group of markets, such as San Jose, Seattle, and Denver, the high cost of living has made homeownership a difficult accomplishment, not only for millennials but for all generations. The high number of millennials in the market shows how popular these markets have become, but older, more financially established generations will be the ones purchasing the majority of the homes next year.”

2021 Top Housing Markets Ranked

Keep an Eye on Sacramento, San Jose, and Charlotte

Topping Realtor.com’s national forecast were the fast-growing cities of Sacramento, California, San Jose, California, and Charlotte, North Carolina.

Related: Forget Demographics—Research THIS Before Investing in a New Market

In Sacramento, median home prices are marked at $554,050, perfect for homeowners fleeing from San Francisco for the increased affordability without having to completely uproot their lives in Northern California.

The same is true in Southern California with San Jose placing second on the list. Median home prices are hovering around $1,199,050—a high number for someone outside of the West Coast but right in line for someone leaving Los Angeles’ bloated prices and exorbitant cost of living. Not to mention San Jose has one of the highest performing school districts in the United States, making it the perfect location for young families looking to cut costs without sacrificing quality of life.

Move over to the East Coast, where financial giant and ultra-fast-growing Charlotte, North Carolina, is continuing to attract some of the best talent in America, which is bolstering one of the top housing markets anywhere around. Median prices hover at roughly $369,000, making Charlotte an extremely affordable spot. With close proximity to the prestigious Duke University, North Carolina State University, and University of North Carolina at Chapel Hill—aka the “Research Triangle”—Charlotte is the logical next step for recent graduates looking to kickstart their careers.

As for investors, while these markets offer the most appreciation value, note that you'll be paying a higher price to enter the market. Land a deal though, and you'll have no problem flipping or finding renters willing to pay.

Which markets are you considering in 2021? 

Join the discussion with a comment below.

By BiggerPockets
BiggerPockets is the nation’s largest and most active real estate investing social network, designed to simplify and enhance networking, deal-making, data evaluation, education, marketing, and transactions for investors, consumers, and professionals.
Read more
15 Replies
    Barry H. Investor from Scottsdale, AZ
    Replied 3 months ago
    It is good to see KC MO in the Top 25 combined score. It has been the best Midwest rental market for the past several years.

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    Kristina Nguyen
    Replied 3 months ago
    Interesting article. Although, I'm curious to why not more cities in Houston or Nevada were considered? You hear a lot about people moving out from CA to Nevada and Texas (including Elon Musk + HP).

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    John Murray from Portland, Oregon
    Replied 3 months ago
    As always the west coast is the place people want to live.

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    Ben Jones Investor from Carmichael, CA
    Replied 3 months ago
    I'm not following the statements made in the second paragraph quoted below, neither in relation to the first paragraph nor as stand alone statements. San Jose is a neighboring city to San Francisco (both in N. Cal) and it is approximately 3rd in the US for home prices, with no cities in S. Cal above it: "In Sacramento, median home prices are marked at $554,050, perfect for homeowners fleeing from San Francisco for the increased affordability without having to completely uproot their lives in Northern California. The same is true in Southern California with San Jose placing second on the list. Median home prices are hovering around $1,199,050—a high number for someone outside of the West Coast but right in line for someone leaving Los Angeles’ bloated prices and exorbitant cost of living. Not to mention San Jose has one of the highest performing school districts in the United States, making it the perfect location for young families looking to cut costs without sacrificing quality of life." Appreciate the post, however. Great news for my fellow Sacramentans!

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    K Martindale from Santa Barbara, CA
    Replied 3 months ago
    I agree. Seems like a typo because it just doesn’t make sense.

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    Mark Eaves
    Replied 3 months ago
    Texas is number two in real estate earnings in the nation.
    Craig Renfrow Flipper/Rehabber from Philadelphia
    Replied about 1 month ago
    Moving an office to Houston.I would like to learn more about ‘ FLIP’ opportunities. Regards

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    Elliott Kleiman
    Replied 3 months ago
    Is there a list available that shows past the top 50?

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    Robi Schreckhise Real Estate Broker from Charlotte, NC
    Replied 3 months ago
    This is great to see Charlotte as #3, there is more and more interest in Investing in Charlotte from investors across the nation and I understand why! Can't wait to have the opportunity to keep working with more out of state investors!
    Craig Renfrow Flipper/Rehabber from Philadelphia
    Replied about 1 month ago
    I live in Charlottesville Virginia.Would like to learn more about ‘FLIP’ opportunities in NC. Thanks

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    Chuck B. Investor from Louisville, Kentucky
    Replied 3 months ago
    I wonder how many investors, especially the younger ones, are paying attention to climate change and how it might affect housing (and habitability) in the coming decades? E.g. Phoenix

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    Robert Morris Investor from Richmond, Texas
    Replied 3 months ago
    Four cities in overpriced California in the top 10? I'm skeptical.

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    Mark Brown Property Manager from League City, TX
    Replied 3 months ago
    Houston is about to top Chicago as the third most populous metropolitan area, but sure let's pretend San Jose is the place to be. California housing regulations drive up the price appreciation, but if you want sales volume, you gotta look at places like Texas. It does not matter how pretty California is, people are going to go where they can afford to live.

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    Blaise Doremus
    Replied 3 months ago
    Win not invest in those California cities.

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    David Avery Flipper/Rehabber from Phoenix Arizona
    Replied 2 months ago
    Go Phoenix, very hot economy and lots of businesses coming daily. Over 320 per day moving here more than moving away. Houses going up all over! Great articles!

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