Leaders & Laggards in U.S. Housing

As the U.S. housing market recovery has progressed, home values are responding to local economic conditions rather than broader national trends. As a result, some metro-area housing markets with very strong local economies are out-performing the nation as a whole, while others are lagging.

Will current market laggards continue to under-perform in 2016 and beyond? Will the momentum of today’s price gain leaders persist, or will it be interrupted over the next five years?

To gain some insight, the latest Zillow Home Price Expectations Survey asked an expert panel of more than 100 leading economists, real estate, investment, and market strategists to share their expectations regarding the rate of home value change in the 20 largest individual U.S. metro area housing markets relative to the expected national average. For each of two future time horizons – the next 12-month period, and the next 5-year period – we asked panel members to indicate (up to) three metro areas that they expect will outperform most, and (up to) three metro areas that they believe will underperform most, the rate of home value appreciation nationally. (Pulsenomics conducts the survey on behalf of Zillow; 70 of the panelists responded to this question). The panel’s feedback is summarized below.

Next 12 Months

Next 5 Years

Responses to a separate question in this survey revealed concern among some experts that several of these large metro area housing markets are at significant risk of entering bubble territory within the next five years–or are already there.