SAN JOSE (KRON) — 2020 is here, but what does the new year have in store for the still fairly strong Bay Area housing market?
Zillow’s predictions for the hottest housing markets of 2020 were released today.
Real estate experts surveyed say southern states are expected to lead the way this year, while expensive California markets will continue to cool off.
In a survey of 110 economists and real estate experts conducted by Zillow, panelists on average expect U.S. home values to grow 2.8 percent in 2020.
Zillow’s top five housing markets are Austin, Charlotte, Atlanta, Nashville, Dallas and Phoenix.
The experts were a bit more pessimistic about California.
In the San Jose metro area, 23 percent of panelists expect home values to grow faster than their expected national rate while 61 percent expect home values to grow slower than they do nationally while just 16 percent believe prices here will keep pace.
In the San Francisco metro area, 24 percent of the experts said prices would increase faster than the national rate, 64 percent see a slowdown while 12 percent expect prices in San Francisco to grow about the same as they do nationally.
An affordability crisis and the continued lack of inventory is a major factor for growth in the Bay Area according to Zillow economist Jeff Tucker.
“We saw inventory spike around this time last year in Bay Area, so there was a lot of inventory, That meant sellers were actually having to compete for buyers,” Tucker said. “Buyers had a chance to step back, take a breath and consider their options, but that inventory has been whittled down over 2019.”