New Zillow Forecast: Best and Worst Housing Markets of 2026

0:00We are in a housing correction, at least on a national level. But everyone knows real estate and real estate investing are local. What happens in one market can be totally different from what happens in other markets, where burr works may not be great for short-term rental investing, where short-term rental investing works might not be great for flipping. It all comes down to what you're trying to accomplish and what's happening on the ground in your individual market. In today's episode, we're going deep into the dramatic regional differences we're seeing in the housing market across the U.S.

0:35and how you can plan your own investing accordingly.

0:43Hey, everyone. Welcome to On The Market. Thank you all so much for being here. I'm Dave Meyer, and today, sort of going back to my roots, this is one of my favorite things to study and talk about real estate markets. We're going to talk about the regional trends that we're seeing, the opportunities to be had, and the risks you probably want to avoid. You might already know this, but there isn't really such thing as quote-unquote the real estate market. On the show, we cover the national market a lot because it's helpful to understand some big macro trends. But what really matters most to your actual portfolios, to the profits that you're actually generating, is what's happening on the ground in your local market.

1:30And of course, we cannot cover every market in the U.S. in today's show alone, but in this episode, we are going to do a deep dive into housing prices into different regions, different states, different cities across the U.S. and help interpret what it all means. We'll start with just talking about what has been going on in 2025 and what we know about regional markets as of today in October 2025. Then we're going to talk about this sort of interesting and fascinating paradox that's going on in the investing climate right now. Next, we'll talk about rent growth and how regional variances there should factor into your investing decisions.

2:09Then we'll even talk about forecasts because we just got brand new forecasts showing where prices are likely to go by city across the US into 2026. And lastly, I'll just go over my thesis about markets in general and just remind people what I recommend you do about all the information that we're going to be sharing in today's episode. Let's do it. We're going to start with the big picture. You've heard this on the show a lot recently, but everything is slowing down. That's what's happening on a national level. Of course, we've seen regional differences across the years, but the main thing I want everyone to know is even the markets that have been growing the last couple of years, these are your Northeast, your Midwest, places like Milwaukee and Detroit and all across Western New York and Connecticut.

2:57it. They are still up year over year in nominal terms, but their growth rate, which is something we're going to talk about a lot today, is slowing down. And in case you're not familiar with the difference, when I say the growth rate is going down is that maybe last year, Milwaukee was up 7 % year over year, and now it's up 3 % year over year. So still positive growth, but the amount of growth is less and the trend continues to go down. That is the big, broad trend that we're seeing pretty much everywhere in the United States. And just to hammer home this point, I want to show that in previous years, well, obviously during the pandemic, we saw places with 10, 15 % year over year growth.

3:41That's not normal. Actually, normal appreciation in the housing market is about three and a half percent. And so what we're seeing now is the hottest markets are now at normal. For example, I call that Milwaukee. That's been a really hot market the last couple of years. That's now at 3.2%. Detroit's at 3.7%. Rochester, New York at 3.2%. Hartford, Connecticut, which has been on fire at 4.2%. So I'm not saying that there's no pockets of higher growth. I'm just showing that these years of abnormally high growth appear to be over in almost every market in the United States. There are obviously smaller markets, but I'm talking about big major metro areas and almost all of those are now at normal or below average for growth.

4:29And as we've talked about in recent episodes where we talked about the difference between nominal, not inflation adjusted prices and real prices, we are also seeing that almost every market is negative in terms of real prices. Inflation right now is 3%. And so any market where prices are up less than 3 % nominally, you could argue is actually down because it's not growing as fast as the pace of inflation. So that's where we're at right now with the hot markets. But obviously, there's the other end of the spectrum, too. And I hate to pick on Florida. But when you look at what is going on with Florida, it really is getting pretty bad.

5:07Like, I am pretty measured, I feel like, about these things. I have not called for a crash the last four years like everyone else has. But what's going on in Florida specifically is getting to that territory in some areas. You see in Punta Gorda, for example, it's down 13 % in just a year. Cape Coral is down 10 % in just a year. And we'll talk about forecasts in just a little bit, but they're not forecasted to get better. And when I'm looking at a map right now as I talk, it's from Zillow. It just shows basically what's happened year over year in all these markets. And a lot of states are a mixed bag, like even states like Texas, which has a lot of declining markets.

5:49A lot of them are just kind of flat. Right. And there are still some markets that are positive. There are pockets of good. That's not happening in Florida. Florida has been just hit by so many different things, whether it's the oversupply issue, the insurance cost issue, the special assessments going on with condos there, the overbuilding issue. There's just so much going on there that I think it would be safe to say that, you know, Florida is on a statewide sort of crash watch. It's not there yet, but I think there is a decent chance that we will see double digit losses across the state of Florida from the peak of where they were to the bottom where they will eventually bottom out.

6:29But I don't think we're close to that right now. Other areas of weakness, like I said, are Texas and really along the Gulf Coast with Louisiana seeing pretty weak areas too. Arizona has also been struggling. And then on the West Coast, it's kind of just all flat. Like there are some markets in California that definitely aren't doing well. There's some that are mildly up. Same thing's going on with Oregon. Same thing's going on with Washington, Idaho. All along there, you're kind of seeing just a mixed flag of mostly flat stuff. I want to also just talk quickly about a recent report that I saw from Realtor.com talking about the hottest markets in the US.

7:05because Realtor.com, they can look at this stuff in real time, which properties are getting the most listings, have the shortest inventory, shortest days on market. And so they put out this report for the hottest markets in the US. And I want you all to think about what the common thread is while I read off a couple of these things, and we'll talk about it. Number one, Springfield, Massachusetts. Then we have Hartford. So again, Hartford, hottest growth last year, still really hot. Kenosha, Wisconsin, Lancaster, Pennsylvania, Appleton, Wisconsin, Wausau, Wisconsin, Racine, Wisconsin, Rockford, Illinois, Beloit, Wisconsin, Green Bay, Wisconsin, all in the top 10.

7:44Then we have a couple others. I'm not going to read them all, but in the Northeast, like Manchester, New Hampshire, Providence, Rhode Island, Worcester, Massachusetts, Milwaukee, all of this. So what do you notice about these markets? Well, yeah, a lot of them are in Wisconsin. Wisconsin is on fire right now. But what I notice here and has been my thesis about the housing market for, God, years now, is affordability. All of these markets, all of the markets that are still doing well, that are still hot, are relatively affordable, meaning the people who live in that market can afford to buy homes.

8:23It's not like you need inbound migration or you need massive amounts of job growth right now. It's just that regular people who are gainfully employed in this market can go out and buy a home. Those are the markets that are doing well. And I believe it's the markets that are going to continue to do well. And you might be thinking, wow, the Northeast is very unaffordable. Why are you calling those markets affordable? It's all relative. Because even with a generally expensive region like New England or the Northeast, there are more affordable options that are hot right now. For example, New Haven, Hartford, Connecticut, New London, Connecticut, all these places in Connecticut, why are they so hot right now?

9:07Well, they're directly between Boston, an enormous economic hub that is very expensive, and New York City, an enormous economic hub that is very expensive. So if you're looking to live in this region and maybe you only have to go into the office a couple of days a week, Connecticut is looking like a very attractive option because it is relatively far more affordable than these other options in the Northeast. That's why I say it's all about affordability. Providence, Rhode Island, been a very, very hot market the last couple of years. Same with Worcester, Massachusetts. And yeah, the median home price in those markets is way above the national average at$550 ,000.

9:49But it's not Boston where the median home price is over$800 ,000. So to me, what's happening is it's all about relative affordability. And this is a really important takeaway because people say things like you can't invest in the Northeast or California or Washington state. Well, clearly there are pockets of places that are growing. And I am not saying that affordable markets are going to be completely insulated from the correction that we're in, because I believe a lot of these markets are going to decline. But affordable places, in my mind, are going to see the least dramatic dips in the coming year.

10:28So look at Austin. That is an awesome market, but it got way more expensive for the average person who lives there over the last couple of years. combine that with supply issues and you see a big correction. Same thing went out in Boise, same thing going on in Las Vegas. And actually that brings us to the next thing I wanted to talk about, which is the other side of the coin. We just talked about the top 20 or so markets that are the hottest right now. What about the coolest? Or if you want to frame it in positive terms, you could call it the strongest buyer's market in the United States right now.

11:00Number one, I didn't even plan this, but is Austin, Texas. Shocking, shocking, where you were in a place where sellers outnumber buyers by 130%. This is wild. Think about this. So this is a report that came out from Redfin, and it shows that right now in Austin, there are 17 ,403 sellers right now. How many buyers are there? 7 ,568. That's a difference of nearly 10 ,000 buyers. There are 10 ,000 buyers missing in Austin right now. So if you want to, you know, just peek ahead to what we're going to talk about soon about where these prices are going in a market like that, they're going down. See similar things in Fort Lauderdale, where it's 118%, West Palm Beach, Miami, Nashville, San Antonio, Dallas, Jacksonville, Las Vegas, and Houston.

11:53Those are the top 10. So pretty much all in Texas and Florida. You also have Nashville and Las Vegas thrown in there. But those of the biggest markets in the country are seeing the biggest imbalances right now, which means buyers have the most power, but prices are also likely to drop. And this situation actually brings up this kind of interesting paradox that's going on in real estate right now, where there are some really good markets that are in deep corrections. So does that make that a really good opportunity or a lot of risk? We'll get into that right after this break. Stay with us. Investing in real estate has always been smart, but it hasn't always been simple.

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15:10Welcome back to On the Market. I'm Dave Meyer. Going over some regional trends that we're seeing in the housing market right now. Before the break, we talked about what's been going on with prices. We talked about some of the hottest markets, mostly in the Northeast and in Wisconsin specifically. specifically we talked about the coolest markets which are mostly in Florida and Texas we had Vegas and Nashville on top of that but I wanted to talk about this a little bit more because I think there's this interesting paradox that's been going on for a couple of years and I think it's just going to get more dramatic which is that some of the markets that are experiencing the biggest corrections and are likely to go into further corrections are markets with pretty good long-term fundamentals.

15:53Like Austin, Texas, you know, it gets picked on a lot because it's been beat up for three years right now. But there's still a lot of good stuff going on in Austin. It's still a very desirable place to live. It has good job growth. It's the state capital. There's a giant university. Like there are a lot of things to like about the Austin market. The same thing goes with Nashville, right? That's been one of the hottest, most popular cities in the country. Dallas has a lot of great fundamentals. And the list goes on. I invest in Denver. It's not on this top 10 list, But the same thing is absolutely going on in Denver, where prices are going down a little bit.

16:25Rents are even going down in Denver. But it's a city with really good long-term fundamentals. And so this is something I just think that you should consider as an investor. I'll talk about this a little bit more at the end when I talk about what to do about this. But if you are an investor who is willing to take risk and wants to take a big swing, you're going to be able to buy good deals in these markets. Like good deals are coming in Austin. They're coming in Nashville. They're coming in Dallas. I can tell you that. Like if you are looking at a market like Dallas, where there's 32 ,000 sellers and only 16 ,000 buyers, you're going to be able to negotiate because for every single buyer, there's two homes.

17:05So there is going to be tons of opportunity to negotiate. Now, of course, you're going to have to protect yourself and you do need to take a long-term mindset because we don't know when these markets are going to bottom out. But I do think this situation is going to become even more dramatic where, you know, I'm going to borrow a word from the stock market, but some of these markets might become what you would call oversold. The supply and demand dynamics just shift in a way where prices go down probably more than they should. A lot of these markets do need to come down in terms of affordability.

17:36But I think you're going to be able to find good deals in these markets in the next couple of years if you are willing to take on a little bit of extra risk to realize what will potentially be some outsized gains in the future. Now, I want to turn our attention now to some forecasts for what is likely to happen over the next year, because Zillow actually just put out their forecast for metro price changes between September 2025, September 2026. And I know people like to hate on Zestimates, but Zillow's been pretty good about this. They've been pretty accurate about their aggregate macro level forecasts, and it's something I definitely look at.

18:14And what they're forecasting is a lot more of a mixed bag. So we are going to see the Northeast and the Midwest that have been pretty good, still be pretty good. They're probably still going to lead the country regionally, but it's going to come a lot closer to flat in the next year. And they're also forecasting that even the markets that are down, you know, Austin, for example, they're also going to come closer to flat. Just as an example, Zillow believes that the fastest growing market over the next year will be Atlantic City, New Jersey with 5 % growth. We have Rockford, Illinois and Concord, New Hampshire at 5%, Knoxville, Tennessee at 5%, Saginaw, Michigan at 5%, Fayetteville, Arkansas, shout out to Henry at 4.8%, Hilton Head, Connecticut, and then more places in Connecticut.

19:04But we're getting some other places towards the bottom of the list. Jacksonville, North Carolina. We're seeing Morristown, Tennessee. So a lot of places in the Northeast, they're projecting that the Midwest cools down a little bit, but the Carolinas and Tennessee, which have been really strong for the last decade, but a little weak in the last year, starting to rebound. Meanwhile, if you look at what they're forecasting for the lowest performing markets, it doesn't look good for Louisiana. The bottom five markets are all forecasted to be in Louisiana, Huma, Lake Charles, Lafayette, New Orleans, Shreveport.

19:39You skip a couple and then Alexandria, Louisiana, Monroe, Louisiana, all told seven out of the top 10 are in Louisiana. The rest are mostly in Texas. We have Beaumont, Odessa, Corpus Christi, and we see San Francisco, California, Chico, California, Punta Gorda, Florida. Mostly what they're projecting is a year of more flatness. They're not projecting most markets to go down by more than one or 2%. The majority of markets in Zillow's forecast are between negative 2 % and plus 2%. So that's where Zillow thinks we're going. And most other forecasters don't put out monthly forecasts like Zillow. That's why I like this is they are just constantly looking at new data, taking it in and updating their forecasts.

20:25Whereas a lot of the other companies put this out annually. And so we will get a lot more forecast towards the end of the year, but this is the most recent one we have. And I do think it's pretty reasonable. Obviously, they're not going to be right about everything, but I think they're generally in the right direction based on the other data that I've been tracking, inventory levels, housing dynamic levels across the country. I think they've done a good job here. All right, we got to take one more quick break, but when we come back, we're looking at rents and how that factors into the equation, regional differences there.

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25:04Welcome back to On the Market. I'm Dave Meyer. going over regional data that we're seeing in the housing market. We've now gone deep into prices in the US. We've talked about what happened over the last year, what's happening right now in the hottest markets, biggest buyers markets. And then we looked at Zillow's forecast for what's likely to happen over the next year. I want to turn our attention to one more data set before we do the whole so what of this whole thing and talk about what you should be doing about this. And that's rent, because obviously this is going to matter a great deal in your own investing decisions.