Zillow puts Bay Area at bottom of 2025's hottest markets prediction. Here's why

Here is something you don't hear often. The Bay Area is at the bottom of a new real estate survey. Yes, Zillow Report is looking at the hottest housing markets in the nation. So why is the Bay Area left out of the cold? And what does that mean for buyers and sellers here? Here's NBC Bay Area's Ian Cole. Generally speaking, the Bay Area ends up at the top of most real estate surveys, whether it's because we're in demand or because housing prices here are so high. But a recent analysis from Zillow predicts the hottest and most competitive markets in the new year and were nowhere to be found. Buffalo, New York was number one. Indianapolis was second. San Francisco and San Jose came in at the bottom of the 50 major metro areas. But why? Employment growth in those markets, like San Francisco, for example, has kind of stagnated in the past year. The information and tech sector is often disproportionately affected by a higher for longer interest rate environment. The report takes into account Zillow's forecast for local home value growth and how quickly homes are selling. It also considers job growth per new home permitted. For the Bay Area, Zillow forecasts slow job growth and prices staying flat in San Jose and actually dropping by nearly 2 percent in the city. And so as housing demand has cooled over the past year, inventory has increased and homes, especially in San Francisco, are sitting on the market for longer than they did before the pandemic. You know, I guess hot markets is all relative. We have a hot market right now. Tammy Peters is the president of the Silicon Valley Association of Realtors. She says what she sees doesn't line up with what Zillow found. There was over a hundred groups of buyers through one of my colleagues open houses this weekend in Santa Clara. So they're definitely out there. People are getting multiple offers still. And because we have limited inventory, she says Bay Area home prices have not cooled over the past five to 10 years. It is still a seller's market. I think the last time we had a buyer's market was after, you know, we had the recession. So while Buffalo and other cities might see more growth under Zillow's parameters, it doesn't look like homes here will be any cheaper anytime soon. Ian Cole, NBC Bay Area News.