grand-rapids-bridge Grand Rapids, MI, is Trulia’s number one real estate market to watch for 2016. Photo: Russell Sekeet/Flickr

Next year, hot coastal markets like the Bay Area will cool off and midwestern real estate will sizzle — at least that’s what Trulia says in its forecast for the US housing market in 2016.

Those are among the views Ralph McLaughlin, the popular real estate listing site’s housing economist, recently outlined in a blog post of Trulia’s predictions for American real estate in the near future.

The Bay Area lag Trulia is expecting is part of a broader trend that would see prices in the super-expensive western and northeastern coastal markets moderate as buyers are priced out (though a lack of new single-family homes would keep prices from dropping). At the same time, activity would climb in what Trulia calls the “Bargain Belt” — that is, the more affordable southern and midwestern markets.

Trulia says the rise of the Bargain Belt is already in motion. In August, North Carolinian metros Winston-Salem and Charlotte are among the markets that saw the amount of time homes spent up for sale decline the most year-over-year.

Meanwhile, more than half of Trulia’s top 10 markets to watch — based on job growth, low vacancy rates, affordability, population share of millennials, and inbound home searches outpacing outbound — were in the south or midwest.

In fact, Grand Rapids-Wyoming, MI, topped the list for being highly affordable and providing good employment prospects. The other Bargain Belt markets included Charleston, SC, Austin, TX, Baton Rouge, LA, San Antonio, TX, and Columbia, SC.

Regardless of the region, buying will remain the best option for the money next year, writes McLaughlin. The economist says a Federal Reserve rate hike is a given but that interest rates would need to climb about 6.5 percent nationally — and even higher in many metros — to tip the scales in favor of renting.

“Coupled with tempered price growth, this should keep buying a better deal than renting,” says McLaughlin in the post.

There is a caveat of sorts. In several pricey California markets — the Bay Area, Sacramento, Ventura County and San Diego — a pair of 0.25 percent Fed rate hikes “would actually push the rent vs buy math close to renting.”

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