This year’s top ten out of 100 markets include in order: Sacramento, San Jose, Charlotte, Boise, Seattle, Phoenix, Harrisburg, Oxnard, Denver, and Riverside, California. “I see the top markets as those with strong local employment, and a technology-centric remote workforce. The list is an interesting window into a post-pandemic world,” said realtor.com Senior Economist George Ratiu. “The presence of a state government provides an ecosystem of stability to the market,” he adds.
According to realtor.com®’s local market forecast, home prices across these top 10 markets are forecasted to increase by 6.9 percent and sales by 13.1 percent year-over-year. That’s compared to forecasted national numbers of 5.7% price appreciation and sales growth of 7 percent.
No surprise that technology continues to drive market growth and strength. Sacramento, San Jose, Boise, Denver, and Seattle home prices have benefitted from high-paying tech jobs. Look to Charlotte and Phoenix as expanding tech hubs. Fifty of the one hundred markets on realtor.com are state capitals. The economic stability supported by a strong state government bodes well for Sacramento. Boise, Phoenix, Harrisburg, and Denver. Here’s a deeper dive into the top three markets and how far how your money goes in each.
Sacramento ranks number one for 2021 with a median home price of $554,000. Home prices are expected to increase by 7.4 percent while sales activity will increase 17.2 percent. In the Cottonwood Country neighborhood, a 2,034 square foot home just came on the market for $453,000 well below the median price. If you are coming from Silicon Valley or San Francisco this 3-bedroom 4-bath home has an affordable price.
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At number two is San Jose though only 121 miles south of Sacramento where the median home price is more than double Sacramento’s at $1,199.50. Despite that realtor.com forecasts prices to rise 10.8 percent in 2021. Your money doesn’t go far in San Jose compared to Sacramento. Available inventory remains low often resulting in above-asking price offers. A new listing at $1,500,000 is a 1,976 square foot craftsman style bungalow both perfectly restored and contemporary in style. With a variety of in-demand upgrades, this property should sell quickly.
Moving east with a number three ranking is Charlotte, North Carolina. Millennials looking for more affordable areas to raise families have sought out North Carolina. With work from home options, Charlotte has much to offer from good schools to mild weather. There is lots of new construction as builders respond to demand. With a median home price of $368,819, sales activity is expected to grow by 13.8 percent. The market is so strong there a new listing at $375,000 a 3,206 square foot move-in-ready Colonial-style home built in 1997 has a “clock” on offers. The listing copy includes “MULTIPLE OFFERS RECEIVED. HIGHEST & BEST DEADLINE 6 PM 12/30/20”.
“I see remote work still a big part of the landscape next year. Buyers should expect mortgage rates to inch up in 2021 ending the year around 3.4 percent. Yet that is still affordable. Even if workers return a few days a week to large urban cities I can see a one- or two-hour commute from a city like Harrisburg. Also, tech workers from San Francisco have moved to Boise and make the 90-minute flight when necessary,” explains Ratiu.
As we begin 2021 look to increased demand in more affordable markets as work from home continues to be defined and the fundamentals of the workforce refined.