{"id":144731,"date":"2022-09-16T13:48:35","date_gmt":"2022-09-16T19:48:35","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=144731"},"modified":"2024-01-05T17:29:02","modified_gmt":"2024-01-06T00:29:02","slug":"zillow-home-price-forecast-2022","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/zillow-home-price-forecast-2022","title":{"rendered":"Here&#8217;s Zillow&#8217;s Home Price Forecast for the 100 Largest U.S. Markets. Hint: California is Struggling"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC1138615820&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">If you\u2019ve been following the news for the past couple of years, you would know that predicting what the housing market, or what any economic market will look like in the future, is nearly impossible.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The economies and the various markets across the world, from European energy to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/inside-chinas-real-estate-crisis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Chinese real estate<\/span><\/a><span data-preserver-spaces=\"true\">, have been wild.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But, regardless of the uncertainties, humans tend to like predicting the future, as bad as we typically are at doing this. That said,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/data\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Zillow released its latest home value forecast<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;through August 2023, highlighting where the largest U.S. markets are trending.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Below, you\u2019ll find a chart of the largest 100 markets in the U.S. and their projected home value change based on&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/zhvi-user-guide\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Zillow&#8217;s Home Value Index<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Where the Largest 100 Markets Are Heading<\/span><\/h2>\n\n\n<p><iframe title=\"Zillow's Home Values Forecast\" aria-label=\"Split Bars\" id=\"datawrapper-chart-1UBwL\" src=\"https:\/\/datawrapper.dwcdn.net\/1UBwL\/4\/\" scrolling=\"no\" style=\"width: 0; min-width: 100% !important; border: none;\" height=\"2527\" frameborder=\"0\"><\/iframe><script type=\"text\/javascript\">!function(){\"use strict\";window.addEventListener(\"message\",(function(e){if(void 0!==e.data[\"datawrapper-height\"]){var t=document.querySelectorAll(\"iframe\");for(var a in e.data[\"datawrapper-height\"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data[\"datawrapper-height\"][a]+\"px\"}}}))}();\n<\/script><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As you can see in the chart, many markets will still see appreciation year-over-year (YoY), while some are starting to drop off. Zillow\u2019s forecast for the U.S. as a whole is 1.4, which is down from the 7.8 that they forecasted in July.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">What\u2019s changed since then? The Fed has continued to push interest rates up and has signaled that the end isn\u2019t near as long as inflation continues to run rampant. While inflation has fallen from its peak slightly,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bls.gov\/news.release\/pdf\/cpi.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">August\u2019s CPI report<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;still pegged price growth at 8.3% YoY. That\u2019s unsustainable, obviously.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to Zillow, Wooster, Ohio (not featured in the top 100) will see the largest growth in home values, at 12.8. The largest decrease will be in Fairbanks, Alaska (not featured in the top 100) at -7.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Among the largest 100 markets, the highest growth is projected in Knoxville, Tennessee, and Tampa, Florida, at 5.3. San Jose and San Francisco, California, are projected to have the sharpest decline among the largest markets, at -4 for each.<\/span><\/p>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/city\/10200\/TN\/Knoxville\/housing-market#demand\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Knoxville\u2019s housing market<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is up 23% YoY with a median sales price of $319,000. However, demand is waning. Homes sold above list price are now down to 42.4%, 10.5% lower than August 2021. Despite this, Zillow still forecasts the market to grow more than other markets.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Why? Supply and demand. We still have a major supply issue, and despite demand falling as much as it is, it goes to show how little supply has been. Median Days on Market in Knoxville remain lower than pre-Covid levels at 41 days.<\/span><\/p>\n\n\n\n<p><em><a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" target=\"_blank\">Quickly match with an investor-friendly real estate agent<\/a> who can help you find, analyze, and close your next deal.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Waning Demand Doesn\u2019t Mean the Housing Market is Crashing<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Falling demand will naturally lower prices as sellers compete more to sell their homes. But that doesn\u2019t create a crash on its own and doesn\u2019t indicate a cataclysmic crash like 2008.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Sure, prices<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.businessinsider.com\/home-prices-wont-come-down-millennials-cant-afford-homeownership-2022-6\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">&nbsp;fell by 33%<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;during the Great Recession, but that was after mass defaults created by a subprime lending crisis that spiraled out of control. Today, many homeowners have locked-in low fixed interest, 30-year mortgages that are within the bounds of their affordability due to stricter regulations from the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.consumerfinance.gov\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Consumer Finance Protection Bureau<\/span><\/a><span data-preserver-spaces=\"true\">, a government entity that did not exist until 2011.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In other words, declining prices, especially at the rate they\u2019re going (slowly), mean little in the grand scheme of things. If anything, we should expect this as a natural byproduct of free markets, although the Fed has definitely played its hand at making sure consumers stop spending money.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In April, Dave Meyer&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/buy-before-rates-rise-or-wait\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">predicted that a housing correction<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;would be in the ballpark of 5-10% in price declines if there were to be a correction. This was prior to the larger interest rate hikes that slowed down the summer. As of September 2022, according to Redfin, national median home prices have fallen from $430,000 in May to $406,000 in August. That constitutes about a 6% decrease.&nbsp;<\/span><\/p>\n\n\n\n<p><em>Speaking of Dave, buy his new book <a href=\"https:\/\/store.biggerpockets.com\/products\/real-estate-by-the-numbers\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a> to help you analyze deals like a pro and continue investing with confidence in any market<\/em>!<\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But when we consider markets like <a href=\"https:\/\/www.redfin.com\/city\/17151\/CA\/San-Francisco\/housing-market\" target=\"_blank\" rel=\"noreferrer noopener\">San Francisco<\/a>, where median home prices peaked at $1.6M in April and have since fallen by 24% to $1.3M, there are clear disparities across U.S. markets. San Francisco, as well as several other Californian markets, may very well have their own mini-housing crises, but could that echo across state boundaries? I\u2019m not so sure.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Those markets were overinflated beyond what the traditional American family could afford. Moving into those cities, unless from somewhere else in California, was next to impossible. While <a href=\"https:\/\/www.biggerpockets.com\/blog\/this-city-saw-the-highest-net-migration-in-the-us-this-year\" target=\"_blank\" rel=\"noreferrer noopener\">many migrate out of California<\/a>, few move in, creating a demand issue much greater than what other markets are experiencing, sending prices on the decline much faster than the likes of more affordable places like Pittsburgh, Pennsylvania.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The best way to use the data above is to determine where you want to invest your money. Remember, forecasts aren\u2019t always accurate and are revised constantly, but they can be used for making reasonable assumptions that a market may perform better or worse over the next few months to a year.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Of course, do your research. Find the population trends, business growth, and other internal market dynamics before picking an investment spot, but use this as a quick starting point.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('On The Market Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/zillow-home-price-forecast-2022',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"has-text-align-left mt-0 wp-block-heading\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" alt=\"\" class=\"wp-image-142373\" width=\"256\" height=\"63\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"auto, (max-width: 256px) 100vw, 256px\" \/><\/figure>\n\n\n\n<p class=\"mb-0\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n\n\n\n<p class=\"mt-0 has-slate-600-color has-text-color\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n\n\n\n<div id=button-custom-event-block_624f4a1837234 class='button-custom-event'>\n      <a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&#038;si=8000000019411002&#038;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" x-on:click=\"window.analytics.track(&#039;On The Market Blog Sponsor Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/zillow-home-price-forecast-2022&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n  <\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019ve been following the news for the past couple of years, you would know that predicting what the housing market, or what any economic market will look like in [&hellip;]<\/p>\n","protected":false},"author":612375,"featured_media":144733,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7119,7381],"tags":[],"class_list":["post-144731","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-daily","category-housing-prices"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/144731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/612375"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=144731"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/144731\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/144733"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=144731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=144731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=144731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}