San Francisco, San Jose among top under-performing metro areas in 2020 US housing market, according to report
SAN FRANCISCO, Calif. (KGO) -- The housing market in the Bay Area will experience a cooling period this year, similar to 2019, according to a national survey conducted by Zillow, an American online real estate data company Zillow.
Zillow consulted a panel of more than 100 economists and real estate experts in the country and asked for their expectations on the housing markets, which cities are going to out-perform or under-perform.
Top 25 metropolitan areas in the country were analyzed and San Francisco, followed by San Jose had the worst scores when it came to expected performance. Oppositely, the hottest housing markets are expected to be Austin, Texas, followed by Atlanta, Ga.
Like any athlete, San Francisco had a "personal best" in the home value growth area, and was achieved before 2019.
"The boom in the country right now is occurring in the Central states and South East," said Mike Englund of Action Economics in Boulder, Colorado. He was one of the economists asked to give his 2020 expectations for the housing markets.
When surveyed which of the top 25 metro areas are expected to underperform, 64% of them said San Francisco and only 24% thought it might out-perform. Subtracting 24 from 64, San Francisco gets the worst marks in the country, a negative 40.
San Jose didn't do much better, getting a minus 38.
Fluctuating interest rates and the new tax law which caps your itemized deductions at $10,000 have had an impact on this cooling-off trend.
"Just based on interest rates and stock prices going up and down and fluctuating, I do believe there is a little bit of a slowdown," Simon Shue, a real estate agent with Compass said. "It's still in an upward trend but we're experiencing a little bit of a plateau."
Mark Calvey, a senior reporter with the San Francisco Business Times said, "You're looking at saying, 'Do I want to pay this high price for a Bay Area home or do I want to go to another city when I can save for retirement, save for my children's college education and still have a nice home?'"
Of the 14 markets that received a positive score, 11 of cities are located in the Southwest, Southeast or Texas, according to the report.
The Times is about to release an article revealing the top cities where California residents are moving to like Denver, Nashville, Atlanta and Dallas.
For those thinking of selling now, Englund says it may be a good idea to wait.
"California real estate has appreciated more than in other regions so I think you sit back and ride out the slow down because there will probably be booms in the pipeline in any case," added Englund.
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