Real estate website Zillow released a new ranking of the “Hottest Housing Markets” for 2026, analyzing housing competition levels based on data such as home price appreciation, listing days on the site, and more.
The metrics showed that two California cities will be among the “hottest” markets in the country…
Which California cities made Zillow’s list of 2026’s “hottest markets?”
Zillow’s list of the “hottest housing markets” puts San Jose, CA at #5 and Los Angeles, CA at #8 in the United States.
The full list ranks as follows:
- Hartford, CT
- Buffalo, NY
- New York, NY
- Providence, RI
- San Jose, CA
- Philadelphia, PA
- Boston, MA
- Los Angeles, CA
- Richmond, VA
- Milwaukee, WI
In Los Angeles, typical home value was listed at $941,869, with 42% of homes sold above asking price in 2025. There are still 18.5% fewer homes for sale than there were before the pandemic.
What makes a “hot market?”
The “hottest markets” have several points in common that signal competition for buyers, giving sellers an “upper hand.”
Zillow notes the “marked lack of choices,” which results in stiff competition for the listings that do appear. #1-ranked Hartford, for example, still lists 63% fewer listings compared to before Covid.
San Jose’s inventory of listings is the closest city to pre-pandemic levels, although there is still a 27% deficit there, compared to the nationwide deficit of 17%.
Zillow calculated the index based on a combination of factors, including home price growth, the speed of home sales, and the relationship between the number of new jobs created versus the number of new home building permits issued.
This year, the company also factored in new competition metrics, including the share of listings with a price cut and the share of homes that sold above list price. In San Jose, for example, over 60% of homes sold above list.
Overall in the United States, Zillow anticipates that home values will rise 1.2% in 2026, and existing home sales will increase by 4.3%. These and other factors point to the housing market settling into “a healthier state” this year.
🌐 Learn more: Zillow’s 10 Hottest Housing Markets for 2026