The Biggest Growth Spots in the Next 20 Years

Small to mid-sized cities will likely be the “biggest winners in the    housing market two decades from now,” predicts Stan Humphries, Zillow’s    chief economist. Some of these cities will be near large metro areas while    some may be more distant and include small to mid-sized cities in college    towns too, Humphries adds.

Humphries says market “winners” in the next 20 years will likely be    places like Austin, Texas; Savannah, Ga.;    Athens, Ga.;  Rochester, N.Y.; Boulder, Colo.; Madison, Wis.; Knoxville,    Tenn.; and Spokane, Wash.

“Why do I think that these communities are going to fare better than    rest?” Humphries writes in an article for Business Insider.“The    suburbs and exurbs around large coastal metros like New York, Los Angeles,    San Francisco, Seattle, Miami, and DC have grown in large part because of    strong job creation in these markets paired with rising home prices close    to the urban core. New arrivals coming to these markets in search of jobs    often end up living in the suburbs or exurbs to find affordable housing. Or    they rent housing in the urban core until they marry and have children,    moving out in order to find a bigger home they can afford.”

Humphries acknowledges that the increase in commuting costs could    threaten more home owners moving away from urban cores. But he predicts    that a growth in smaller manufacturing firms “will make smaller metros more    economically viable.”

“If energy costs do rise, I’d definitely bet on the increased dispersion    of firms to suburbs and beyond versus the proposition of more migration of    people from these areas into the urban core,” Humphries notes.

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