Among the 400 largest housing markets tracked by Zillow, the company expects 294 markets to see positive home price growth between March 2023 and March 2024, while it expects four markets to remain flat and home prices to fall over the next 12 months in 102 markets.
Just one month ago, Zillow expected 238 markets to rise between February 2023 and February 2024, while it expected 156 markets to decline during that same span.
Let’s take a closer look at Zillow’s latest forecast.
Between March 2023 and March 2024, Zillow expects some of the biggest home price upticks to occur in markets like Knoxville, Tenn. (+4.5% forecasted home price growth), Savannah, Ga. (+4.5%), Winston-Salem, N.C. (+4.4%), Johnson City, Tenn. (+4.2%), and Wilmington, N.C. (+4.1%). Simply put: Zillow’s forecast model expects a great deal of strength in the U.S. Southeast.
“Many markets may have already seen prices bottom out, and those price declines may be helping entice more buyers this spring,” wrote Jeff Tucker, senior economist at Zillow, in a recent report. “The very low [levels of] inventory is likely a major reason that home prices [in some markets] have begun to rise again.”
However, Zillow economists do expect home price declines to occur between March 2023 and March 2024 in markets like San Francisco (-2.6% forecasted decline), Boulder, Colo. (-1.6%), Denver (-1.3%), Reno, Nev. (-1.3%), and Las Vegas (-1%).
As Fortune has previously reported, Not only does the West have a high concentration of rate-sensitive tech employers, but it also has overheated home prices that are vulnerable to mortgage rate spikes. If Western buyers were already stretching themselves then (see here) while mortgage rates were low, it only makes sense that they’d finally push back once mortgage rates spiked. Cue falling home prices.