Mynd Management has released a new study analyzing the 20 best housing markets for sellers in 2021. For the study, Mynd Investor Services, a full-service platform and marketplace for real estate investors, analyzed year-over-year home price appreciation (HPA) trends from 2019 to 2020 in hundreds of metro areas nationwide.
The three best housing markets for property owners seeking appreciation are Milwaukee, WI, Memphis, TN, and Detroit, MI. Milwaukee HPA skyrocketed 19.9%, while Memphis prices jumped 16.6% and Detroit metro area prices increased 15.4% in 3Q 2020 year-over-year.
Interest Rates, Low Inventory and COVID-19 Impacted Housing Market Shifts
“While 2020 has been an incredibly challenging year for many industries, the single-family housing sector remained resilient,” says Don Ganguly, senior vice president of Mynd Investor Services.
In 2020, the reversal of a decades’-long trend in the real estate investment market emerged: The leading regions when it comes to home price appreciation shifted to more suburban areas, away from the coasts. The significant increase in remote work spurred by COVID-19 has enabled many U.S. employees to live wherever they want, a trend that will likely continue this year.
Lack of New Construction and Listings Push Prices Higher
According to Mynd Investor Services’ Data Science team, constrained supply placed upward pressure on prices throughout 2020. This lack of new construction, along with sellers who postponed their property dispositions, have contributed to dwindling supply.
Homebuyers have been scouring affordable for-sale housing options, both in their local markets and remotely. As a result, the inventory of active listings declined 40% from 1.1 million in December 2019 to 685,000 in December 2020.
3 Factors Bolster Single-Family Housing Demand
In short, three main reasons drove demand for housing across the U.S. in 2020:
- The Coronavirus pandemic and other factors prompted people to move out of dense downtown areas, such as Los Angeles, CA, New York, NY, and San Francisco, CA, to lower density suburbs with spacious homes and more affordable prices.
- Low interest rates continued to influence affordability for a burgeoning class of buyers — millennials.
- Increasing numbers of people are moving to affordable cities from coastal areas and purchasing lower-priced homes, December 2020 data from the U.S. Census Bureau indicates.
Which 5 Metros Are People Moving to?
Last year, a number of factors sent U.S. residents to inland areas, and away from the coasts in droves. Harsh winters, job availability, affordability, low tax rates for individuals and corporations, and the ability to work prompted people to pack their bags in search of new beginnings. As a matter of fact, Phoenix attracted the most movers due to its warm weather, affordability and relatively low taxes, according to North American Moving Services.
According to Mynd Investor Services here are the top five destinations for movers in 2020 are:
Top MSA Destination Cities
- Phoenix, AZ
- Houston, TX
- Dallas, TX
- Atlanta, GA
- Denver, CO
Below are the top five metro areas that residents left in 2020 are:
Top MSA Origin Cities
- New York, NY
- Anaheim, CA
- San Diego, CA
- Chicago, IL
- Riverside, CA
Top 20 Markets for Home Sellers
Growing demand for properties outside of expensive major metro areas has fueled significant home price appreciation in many suburbs and non-coastal regions of the U.S. On a regional basis, the markets with the highest HPA are concentrated in the Midwest, Southwest and Southeast, making these regions prime areas for home sellers seeking appreciation.
The top 20 real estate markets for sellers in 2021 are:
For more information or to talk to an expert on real estate investing in markets with strong appreciation or steady monthly cash flow, contact Mynd Investor Services at [email protected].