You can expect the Sun Belt to dominate the housing market in 2022. Tampa, Florida, tops Zillow’s new list of the hottest real estate markets of the year, followed by Jacksonville, Raleigh, San Antonio and Charlotte.
"Home buyers are attracted to markets in the Sun Belt that offer relative affordability, fast-growing economies and weather that allows them to enjoy the outdoors year-round," Zillow economist Alexandra Lee said in a statement.
The value of a typical home in Tampa has risen nearly 30% over the last year to $354,100, according to Zillow. The real estate giant expects Tampa’s explosive growth to continue in 2022 and is forecasting a 24.6% bump in home values over the course of the year.
Tampa also made it onto Realtor.com's ranking of the hottest housing markets for 2022, though that list also featured many cities in the Mountain West like Salt Lake City, Boise and Spokane.
Across the country and especially in the Sun Belt, growth will be fueled by baby boomers looking for homes in top retirement destinations, plus strong interest from millennials, millions of whom are now reaching their peak home-buying age.
The same pandemic trends we saw last year — like remote work and moves away from big cities on the coasts — will still be in play. Nationally, Zillow expects home values to grow 14.3% in 2022.
2022’s hottest housing markets
Here are the 10 hottest cities for buying homes this year, according to Zillow:
- Tampa, FL
- Jacksonville, FL
- Raleigh, NC
- San Antonio, TX
- Charlotte, NC
- Nashville, TN
- Atlanta, GA
- Phoenix, AZ
- Orlando, FL
- Austin, TX
Zillow says these markets will have strong home value growth this year, high job growth, fast-moving inventory and a large pool of likely home buyers. It also notes that the cities on the list are not especially sensitive to climbing mortgage rates or dips in the stock market, both of which have the potential to depress the real estate market in the coming months.
What homebuyers should expect in 2022
Home prices soared in 2021 thanks to a huge surge in demand during the pandemic, and rock-bottom mortgage rates helped fuel a buying frenzy across the country. People looking for a new home in 2022 should expect more of the same.
"Across the board, sellers will remain in the driver's seat, but especially so in the hottest markets,” Lee said. “Buyers should be ready for strong competition for homes, which means bidding wars and homes flying off the market only days after they are listed."
There are some signs, however, that the market is starting to stabilize: Zillow expects New York, Milwaukee, San Francisco, Chicago and San Jose to be the coolest housing markets of 2022 because of their comparatively low job growth and demographics that are less likely to support a huge wave of buying this year.
Of course, “cool” is always a relative term when it comes to the red hot housing market. Zillow says it expects home values to grow more than 10% in all of those cities except San Francisco, which will see an estimated 9.9% growth.