The shortage of starter housing compounds the country's mounting crisis. It’s no secret that many markets across the country have serious shortages of housing for their workforce populations. “Most cities and regions have fallen behind on housing delivery,” observed Daniel Parolek, architect, urban designer and author of Missing Middle Housing: Thinking Big and Building Small to Respond to Today’s Housing Crisis (2020). impacts those who want to buy homes rather than rent too, notes Nicholas Julian, senior program manager for land use at the National Association of Home Builders. “A staggering 96.5 million households, or roughly 73 percent of all U.S. households, cannot afford a new home at (the current $425,786) median price point,” Julian remarked. Julian and Parolek agree that adding missing middle housing to our nation’s stock can help ease the shortage. “These are homes that are more attainable for valuable members of your community including teachers, nurses and firemen,” Julian suggested. “Missing middle housing units, like duplexes and townhouses, may be what is attainable as ‘starter housing’ for folks entering homeownership for the first time these days.” These dwellings can also suit college students, young renters, seniors and young condo buyers. “There are many families who are doubling up in households or with roommates due to affordability,” commented Jessica Lautz, deputy chief economist for the National Association of Realtors. “More affordable solutions may allow young adults to leave the nest or roommates to have household formation independently.” Defining missing middle Missing middle has two meanings: The first is Parolek’s, which is housing that bridges the functional gap between detached single-family homes and mid-rise complexes. It’s the duplex to fourplex, townhouse and courtyard apartment, compact live/work spaces and right-sized buildings that fit architecturally into low-rise neighborhoods with detached single-family homes. It’s also defined as housing in the middle of the price range, between subsidized affordable units for those at or below the poverty level and luxury units for the affluent. There’s a sweet spot where these two definitions converge that millions of would-be tenants and homeowners that serve us all in our cities’ commerce and civic workforce compete to live in. Enhancing livability The goal is creating missing middle projects that enhance livability. They tend to fit well into walkable neighborhoods with coffee shops, restaurants and small markets safely accessible on foot. Pocket playgrounds every quarter mile and conveniently located co-working spaces make these communities appealing to many prospective residents, the architect notes, and potentially engender less development opposition from established neighborhoods. “In our world, where NIMBYs are everywhere and they push hard against any non-single-family projects, the size, scale, and typology of these ‘house scale’ buildings support an easier path to rally community support, especially those that are predominantly single-family home communities,” Parolek remarked. David Spence, CEO of Dallas-based Good Space, renovates missing middle rentals in one of the city’s emerging neighborhoods. Spence attributes the success of his missing projects, including one that became a case study for Parolek’s book, to an emphasis on quality and detail. “We’ve always spent beyond the market on renovations, and it has always worked out in the end in the form of sufficient rents and potential [building] sales prices,” he shared. “We squeeze in a ‘full appliance package’ (e.g., washer/dryer, central HVAC, microwave, vent hood, etc.), but parking is scarce, usually uncovered, and sometimes curbside. There’s no fitness center, no palatial bathrooms, no dog park.” But the firm provides quality in other ways through restoration of old fixtures and finishes, a sense of community, lively color schemes. Since these features don’t cost as much as much as a swimming pool and jacuzzi, Good Space is able to control their basis. Missing middle demographics Parolek sees missing middle housing especially appealing to single- female households, an often overlooked segment, he finds. “Keep in mind that 30 percent of most markets are single-person households,” explained. “A well-designed small unit with higher-quality finishes is ideally what they want. They also like the built-in sense of community and security.” Downsizing Baby Boomers are another good market, he points out. “They are looking for walkability to amenities, a sense of community, and the ability to lock off the unit and travel without having to worry about maintenance,” he explained, noting AARP has included missing middle housing in its Livable Communities Initiative. Another niche Parolek identifies is the household seeking a car-free lifestyle. Walkability and easy transit access is key for these prospects. Opticos-designed Culdesac Tempe, a 650-unit Arizona master-planned community. “It will be the largest car-free community in the United States when completed,” he commented. Last, but definitely not least, is the multi-generational opportunity, where grandparents can live close to their adult children’s families while having their own place in the same community. “Missing middle has historically provided great opportunities to deliver multi-generational housing and will also do so in the future,” Parolek predicted. He sees that encompassing different housing types that can be flexibly combined and separated as kids go off on their own, boomerang kids return, and childcare or eldercare support is needed. Private and profitable One point Parolek is eager to make is that these missing middle projects can definitely be built profitably since they are not dependent on nonprofit organizations to bring them to fruition, like many affordable developments, and they can provide marketing opportunities to sophisticated renters with no competition. “When we opened our first renovated apartment building in 1996,” Spence recalled, “we assumed—based on patterns of the day—that our tenants would preponderantly be gay men moving from similar in-town neighborhoods. As it turns out, 75 percent of our first rent roll came from suburban addresses and 60 percent were single, straight women. While we definitely skew ‘urban’—artsy, alternative, adventurous—our rent roll has remained conventional in many ways: educated, fiscally responsible, generally sober, 30s-ish, upwardly mobile, connected to the community, etc.” While many missing middle projects have been built by smaller local firms like Good Space, Parolek also recommends them being integrated into larger master-planned communities and attracting larger regional and national builders. He sees that as a better development model and competitor to single-family build-to- rent that may be more appealing to city halls and statehouses. Jeff Kottmeier, senior vice president with John Burns Research and Consulting, points to employers acknowledging the need for attainable workforce housing in their conversations with economic development teams. “Some companies are coming to the table saying, ‘I’ll build x units of apartments or homes’ when constructing a new manufacturing facility,” noted. “We’ve seen that in some of the consulting studies we’ve completed in manufacturing towns.” Rezoning and other challenges Two of the reasons why this category has lagged are economic and regulatory barriers, though cities and states are looking hard lately at zoning changes to generate more housing opportunities. “Recently passed state legislation allows up to four units on any single-family lot in Oregon, California, Nebraska, and Washington,” Parolek reported. “A few other states like Montana and New Hampshire have legislation in the works.” He’s working with other cities to remove policy, planning and zoning barriers for missing middle housing development, he adds. Julian calls re-zoning the low-hanging fruit of the housing affordability challenge. “Simply changing codes to legalize housing that is not the traditional large single-family home on a large single-family lot will allow housing that is naturally less expensive,” he observed “It is not the be-all and end-all, but there is little downside of zoning reform to allow missing middle housing development if housing affordability is a true priority.” The NAHB executive notes that, for most home builders, there is little control over cost inputs like development fees, labor, materials and land. “Municipalities have the ability to alter codes and land use policy to make it legal to build smaller units on smaller lots, naturally producing more affordable housing,” he said. New construction faces a particularly difficult route due to the need for land, regulations, and then basics such as material costs, according to NAR’s Lautz. “Adaptive reuse may be an easier route in some communities where there are existing vacant properties that can be rezoned for higher density residential housing,” she noted. Some cities, are encouraging infill/density where existing townhomes are torn down and rebuilt, adding an additional floor and more square footage. “Washington, D.C., is an example where you see homes with a fourth or fifth floor that can be rented as a single townhome or separate units,” Kottmeier said. The biggest cost barrier is that any three-unit or larger housing types trigger the use of commercial building code, Parolek lamented. “We obviously do not want to create dangerous living environments, but it seems like codes make it far too expensive to build these smaller, multi-unit buildings,” he suggested, noting some three- or even six-unit buildings are actually smaller than large single-family homes. “Maybe research could be developed to help define less onerous and less expensive life-safety requirements for buildings up to 10 units to make them more viable.” This is a bipartisan cause that increases property rights and also helps create more workforce housing for middle class citizens, Julian said. “Cities need to refine zoning to remove barriers and find more areas and processes to allow this,” he declared. Advocates like Parolek are working on this. Jamie Gold, CKD, CAPS, MCCWC is a Forbes.com contributor, wellness design consultant, industry speaker, and award-winning author of Wellness by Design (Simon & Schuster, 2020).
https://www.multihousingnews.com/how-missing-middle-housing-can-boost-livability-attainability/  Despite the fluctuations in the housing market in recent years, real estate investment continues to be an attractive asset class for investors. With the potential to earn recurrent income from rentals, real estate can be a lucrative investment opportunity. Although the current scenario of high-interest rates may give some investors pause, the right investment in the right market can still yield significant returns. Investing in real estate can still be considered a viable option despite the current scenario of high-interest rates in 2023. Real estate remains an attractive asset class for investors due to the opportunity to earn recurrent income from rentals. Record-low mortgage rates and a scarcity of available inventory kept the US housing market strong in terms of buyer demand in the past two years. Although mortgage rates have risen, the strong housing demand is still driving prices up, albeit slowly. The US housing market continues to be a somewhat moderate seller's real estate market, with annual price growth slowing down and inventory rising. Potential homebuyers may still face a bidding war if they are looking for a new house at the moment. As a real estate investor, it is important to crunch the numbers and determine the best cities to invest in. During the pandemic, prospective homebuyers around the United States paid top dollar for homes, with remote employees and their desire for more lavish homes fueling the market. However, with the lack of homes for sale, many potential buyers may be unable to find affordable entry-level housing, predisposing them to transition into single-family rentals. Rental demand is expected to continue to increase in 2023 as a result. The single-family rental market in the US remained robust as renters flocked to the suburbs in Q3 2022, according to Arbor's Q3 2022 Single-Family Rental Investment Trends Report. SFR is seen as a viable alternative for potential homebuyers who are priced out of home ownership. The report showed that SFR rent growth slowed but remained elevated, while build-to-rent (BTR) construction starts reached a new record high of 69,000 over the past year. Additionally, cap rates remained unchanged at 5.3% despite rising interest rates. This presents a great opportunity for real estate investors looking to purchase single-family rental properties. This asset class is best positioned to grow in the coming years. The interest of investors in single-family rental homes has risen to a great extent during this pandemic. Large investors are gravitating toward it. However, it is important to conduct thorough research and choose the best places to invest in real estate in 2023. All real estate is local, so understanding the local factors that can affect your investment is crucial. Single-family rental homes provide an affordable and flexible option to meet the needs of families and individuals in search of quality housing. As of now, institutional investors account for only 2 percent of the 90-million unit market, according to NHRC. This is meager as compared to the US multifamily sector, where more than 50 percent of ownership is held by institutional investors. Hence, the single-family rental market remains an emerging market for both individual and institutional investors. In conclusion, despite rising interest rates, investing in real estate can still provide a reliable source of recurrent income. The single-family rental market is particularly promising, as it continues to grow and attract more investors. It's important to do your due diligence when selecting a city to invest in, but with the right research and strategy, real estate can be a great investment opportunity. Let's take a look at some of the best places to invest in real estate. How To Choose the Best Places To Invest In Real Estate? You may be located anywhere in the world, but the basic principles of the real estate business remain unchanged – you want to choose those places for your investment properties where the return on investment is high. To maximize the returns from your real estate investment you want to buy property in places with the following features:
Don't take any uninformed decision without evaluating the fundamentals of the real estate market you intend to purchase in – is it growing, stable, or declining? Are you planning for short-term capital gains or long-term buy and hold? If you're considering a real estate investment in the coming year, there are a few markets worth investigating further due to anticipated price increases. We looked at data and examined trends from across the US to bring you this list of the 21 best places to invest in real estate. Here are the best places to invest in real estate and buy rental properties. They all have their own set of qualities and disadvantages, but many of them are less expensive than the national average.
1. Boise, Idaho Boise, the capital city of Idaho, is becoming a popular destination for real estate investors for several reasons. Boise's strong job market, affordable housing, growing population, stable real estate market, and low property taxes make it an attractive destination for real estate investors. Whether you are looking to purchase a rental property or invest in real estate for capital appreciation, Boise offers a great opportunity for investors. Here are the top reasons why Boise is considered one of the best places to invest in real estate: Real Estate Appreciation: The real estate market in Boise, Idaho has shown strong growth over the past 10 years, with a home appreciation rate of 217.86% and an average annual rate of 12.26%, putting it in the top 10% nationally for real estate appreciation, according to NeighborhoodScout's data. Despite a lower appreciation rate of 7.62% over the last year, Boise's latest quarter showed a 3.87% appreciation rate, equivalent to an annual rate of 16.41%. However, this rate is lower compared to 80% of the other cities and towns in Idaho. It is important to note that while these are average rates for the city, individual neighborhoods within Boise can vary greatly in their investment potential. Strong job market: Boise has a thriving economy, driven by a strong job market in industries such as technology, healthcare, and education. This growing job market attracts new residents, which drives demand for housing and increases property values. Affordable housing: Compared to other major cities in the US, Boise offers more affordable housing options, making it an attractive option for first-time homebuyers and investors. This, in turn, can lead to steady rental income for investors and the potential for capital appreciation over time. Growing population: Boise is experiencing steady population growth, as people are attracted to the city's high quality of life, outdoor recreational opportunities, and affordable cost of living. This growing population drives demand for housing, which can lead to increased property values. Stable real estate market: Boise has a stable real estate market with a low rate of foreclosures and a consistent rate of home price appreciation. This makes it an attractive option for investors who are seeking stability and predictability in their investments. Boise, ID Real Estate Trends: The median listing home price in Boise, ID was $528.9K in December 2022, trending down -2.9% year-over-year. The median listing home price per square foot was $292. Boise, ID was a seller's market in December 2022, which means that there are more people looking to buy than there are homes available. The market had a total sales-to-total listings ratio above 0.2, which tends to favor sellers. On average, homes in Boise, ID sell after 62 days on the market. The trend for median days on market in Boise, ID has gone up since last month, and slightly up since last year. These housing market trends in Boise are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 2. Houston, Texas Houston is one of the all-time best places to invest in real estate. This city is the home of the US oil and gas industry and offers perennial employment opportunities. Greater Houston is Texas' fifth-largest metro region, with over 7.2 million residents, and its population continues to expand at a rate nearly double that of the rest of the country. Forty-one Fortune 1000 companies are headquartered in the Houston region. Houston ranks fourth in the nation on this measure, behind Greater New York, Chicago, and Dallas-Ft. Worth. These strong macroeconomic factors continue to power the Houston housing market. Houston, Texas has several factors that make it a strong market for real estate investment. Some of the reasons include:
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Houston, TX sell after 59 days on the market. The trend for median days on market in Houston, TX has gone up since last month, and slightly up since last year. These housing market trends in Houston are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 3. Dallas, Texas Dallas is another good place to invest in real estate in 2023. Dallas, Texas is one of the most rapidly growing cities in the United States, and for good reason. It has a thriving economy, a growing population, and a diverse real estate market that offers opportunities for both residential and commercial investments. Dallas is a great place to invest in real estate due to its strong job market, affordable housing, growing population, diverse real estate market, positive real estate trend, and pro-business environment. Whether you're looking to invest in residential or commercial properties, Dallas has something to offer everyone. Here are some of the top reasons why Dallas is one of the best places to invest in real estate:
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Dallas, TX sell after 62 days on the market. The trend for median days on market in Dallas, TX has gone up since last month, and slightly up since last year. These housing market trends in Dallas are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 4. Las Vegas, Nevada How can we miss Las Vegas on our list of best places to invest in real estate? Las Vegas has experienced several booms in its history. And it saw an incredible real estate bust during the Great Recession. Las Vegas’ recovery hasn’t made the same headlines as the 50% or greater declines in home values did a decade ago. Yet its recovery shouldn’t keep investors away. Throughout the pandemic, the Las Vegas housing market was among the hottest in the United States. Las Vegas is a city that is known for its vibrant entertainment scene, luxury casinos, and world-class dining experiences. However, it's not just a great place to visit, but also a prime location to invest in real estate. Las Vegas is an excellent location for real estate investment, with a strong job market, high rental demand, affordable housing, a growing population, investment in infrastructure, a thriving tourist industry, and favorable tax benefits. If you are considering investing in real estate, Las Vegas is a prime location to consider. Here are the top reasons why Las Vegas is one of the best places to invest in real estate:
Pioneer Park is the most affordable neighborhood, with a median listing home price of $290.5K. These housing market trends in Dallas are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 5. Atlanta, Georgia Atlanta, Georgia is a city that has experienced remarkable growth in recent years and is now considered one of the best places to invest in real estate. From its booming economy to its diverse culture, there are numerous reasons why you should consider investing in Atlanta real estate. Atlanta is Georgia’s capital and economic center. It is considered one of the 10 most productive states that contribute to the USA’s GDP annually. Atlanta is a city that offers a lot of potential for real estate investors. From its strong economy to its growing population, there are plenty of reasons why you should consider investing in this city. With its low cost of living, diverse culture, and good returns on investment, Atlanta is one of the best places to invest in real estate in the United States. Here are the top reasons why you should consider investing in this city.
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Atlanta, GA sell after 73 days on the market. The trend for median days on market in Atlanta, GA has gone up since last month, and slightly up since last year. These housing market trends in Atlanta are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 6. Orlando, Florida Orlando, FL is a tourism and entertainment favorite, because of this, it remains a strong real estate investment destination. Investors have a choice of targeting the long-term residential or holiday markets with their properties. Both offer strong returns. Orlando, Florida is a highly sought-after destination for both tourists and real estate investors. With its warm weather, a bustling economy, and world-renowned attractions, Orlando offers a number of compelling reasons to invest in its real estate market. Orlando's strong tourism industry, growing job market, affordable cost of living, thriving business community, and a growing population all make it one of the best places to invest in real estate. With a wide range of investment opportunities available, from rental properties to commercial real estate, Orlando is a market that real estate investors can't afford to ignore. Here are some of the top reasons why Orlando is one of the best places to invest in real estate:
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Orlando, FL sell after 72 days on the market. The trend for median days on market in Orlando, FL has gone up since last month, and slightly up since last year. These housing market trends in Orlando are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 7. Tampa, Florida Tampa, FL is also on the list of best places to invest in real estate. With a population of more than 4 million, Tampa, FL is not only an attractive metropolitan area but is also one of the most frequently visited tourist destinations. Tampa, Florida is a thriving city that has been experiencing steady growth in terms of both population and economic development. It is one of the best places to invest in real estate, due to its growing population, strong economy, affordable cost of living, thriving tourism industry, access to the beach, investment opportunities, and favorable climate. With so many factors working in its favor, it's no wonder that Tampa is a popular destination for real estate investors. Here are the top reasons why Tampa is one of the best places to invest in real estate.
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Tampa, FL sell after 70 days on the market. The trend for median days on market in Tampa, FL has gone up since last month, and slightly up since last year. These housing market trends in Tampa are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 8. Spokane, Washington There are several reasons why Spokane, WA is considered one of the best places to invest in real estate. These include its affordable Spokane housing market, strong rental demand, growing economy, and abundant outdoor recreational opportunities. Additionally, the city has a thriving arts and culture scene, a variety of educational institutions, and a low cost of living, all of which make it an attractive destination for both residents and investors alike. Here are the top reasons why Spokane is one of the best places to invest in real estate.
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Spokane sell after 69 days on the market. The trend for median days on market in Spokane has gone up since last month, and slightly up since last year. These housing market trends in Spokane are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 9. Chicago, Illinois Chicago is also on our list of the best places to invest in real estate. Chicago is the third-largest metropolitan area in the U.S., with almost three million in Chicago and another ten million in the surrounding metro area. Chicago has a large population, a diverse economy, and a stable market. Chicago's strong rental market, thriving downtown, presence of well-developed infrastructure, blue-collar areas with high rents, large population, investment opportunities in revitalizing neighborhoods, affordable housing, investment in public transportation, and thriving start-up culture make it an attractive destination for real estate investors. Here are the top reasons why Chicago is one of the best places to invest in real estate.
The market had a total sales-to-total listings ratio below 0.12 which favors buyers. On average, homes in Chicago sell after 73 days on the market. The trend for median days on market in Chicago has gone up since last month, and slightly down since last year. These housing market trends in Chicago are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 10. Austin, Texas Austin, TX is also on our list of best places to invest in real estate. The Austin real estate market isn’t as big as Dallas, San Antonio, or Houston. Austin is only the fourth largest city in the state. However, the Austin housing market is sizable – it is the eleventh largest city in the U.S. as of this writing, and it is the center of a large metro area. Austin has come up as another tech hub in the last 5 to 6 years. There are tons of high-paying tech jobs that moved to Austin in the last couple of years. As Austin is a young city by many standards, Millennials will be the largest buying force in Austin in 2023, and this trend should continue in the coming years. This is going to be more attractive for the areas being close to neighborhood amenities and close to shopping & hang-out spots. Real estate industry experts think that there is no bubble. Austin’s economy is strong and varied. Overall there is a huge scarcity of homes for sale in Austin. It just hasn’t kept up with the pace of people moving here. Here are the top reasons why Austin is one of the best places to invest in real estate.
The market had a total sales-to-total listings ratio below 0.12 which favors buyers. On average, homes in Austin sell after 62 days on the market. The trend for median days on market in Austin has gone down since last month, and slightly down since last year. These housing market trends in Austin are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 11. Columbus, Ohio Columbus is also on the list of the best places to invest in real estate. Its strong economy, diverse job market, affordable housing, and growing population as some of the key factors that make it an attractive destination for real estate investors. Additionally, Columbus's well-developed infrastructure, revitalizing neighborhoods, and thriving start-up culture, provide ample investment opportunities for those looking to invest in the city's real estate market. Here are some top reasons why Columbus, Ohio is one of the best cities to invest in real estate:
The market had a total sales-to-total listings ratio below 0.12 which favors buyers. On average, homes in Columbus sell after 46 days on the market. The trend for median days on market in Columbus has gone up since last month, and slightly up since last year. These housing market trends in Columbus are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 12. Lakeland, Florida Lakeland, FL also enters the list of the best places to invest in real estate in 2023. Florida is one of the most popular states for real estate investing, and Lakeland is a hidden gem in the Sunshine State. Located in the heart of Central Florida, Lakeland is a rapidly growing city with a strong economy, a thriving job market, and a growing population. With affordable housing, a strong rental market, and a low cost of living, Lakeland offers real estate investors the significant potential for long-term growth and profitability. Here are the top reasons why Lakeland, Florida is one of the best cities to invest in real estate.
The market had a total sales-to-total listings ratio below 0.12 which favors buyers. On average, homes in Lakeland sell after 83 days on the market. The trend for median days on market in Lakeland has gone up since last month, and slightly up since last year. These housing market trends in Lakeland are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 13. Ocala, Florida Ocala, FL finds itself on the list of the best places to invest in real estate in 2023. Ocala, Florida is a small but growing city that offers plenty of opportunities for real estate investors. Known for its beautiful natural landscapes and historic downtown area, Ocala has become a popular destination for retirees, young families, and outdoor enthusiasts alike. In recent years, the city has experienced significant economic growth, thanks in part to its diverse industries, including healthcare, education, and manufacturing. Here are the top reasons why Ocala is one of the best cities to invest in real estate:
The market had a total sales-to-total listings ratio below 0.12 which favors buyers. On average, homes in Ocala sell after 85 days on the market. The trend for median days on market in Ocala has gone up since last month, and slightly up since last year. These housing market trends in Ocala are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 14. Birmingham, Alabama Birmingham, AL also ranks in our list of the best places to invest in rental real estate in 2023. The Birmingham AL real estate market continues to take steps in the right direction. Birmingham, Alabama is a growing city that offers many opportunities for real estate investors. Known for its rich history, cultural diversity, and economic growth, Birmingham is quickly becoming a top destination for both new residents and businesses. Overall, Birmingham offers a combination of affordability, economic growth, and cultural attractions that make it an excellent city for real estate investors looking to maximize their returns. Here are the top reasons why Birmingham is a great city to invest in real estate:
The market had a total sales-to-total listings ratio below 0.12 which favors buyers. On average, homes in Birmingham sell after 60 days on the market. The trend for median days on market in Birmingham has gone up since last month, and slightly up since last year. These housing market trends in Birmingham are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 15. Durham, North Carolina Durham, NC is also one of the best places to invest in rental real estate in 2023. The Durham housing market has made considerable improvements since the housing bubble burst. Only two years after the market crash in 2008, Durham was considered one of the few favorable locations to invest in real estate. With strong population growth and a solid economy, the rental demand in Durham, North Carolina is continuously increasing. Durham, North Carolina is a rapidly growing city that offers a strong economy, diverse population, and thriving cultural scene. Here are the top reasons why Durham is a great city to invest in real estate:
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Durham sell after 69 days on the market. The trend for median days on market in Durham has gone up since last month, and slightly up since last year. These housing market trends in Durham are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 16. Charlotte, North Carolina Charlotte is also one of the best places to invest in rental real estate. The Charlotte metropolitan area or Metrolina has experienced rapid population and job expansion. One reason for this is the city's business-friendly environment. The homebuyers in the Charlotte area have dealt with a persistent seller’s market, which has shrunk inventory and driven up home prices. Charlotte, North Carolina is a thriving city known for its diverse economy, vibrant culture, and attractive quality of life. It is the largest city in North Carolina and the second-largest city in the Southeastern United States, making it a hub for business, education, and entertainment. Here are the top reasons why Charlotte is a great city to invest in real estate:
The market had a total sales-to-total listings ratio between 0.12 and 0.2. On average, homes in Charlotte sell after 70 days on the market. The trend for median days on market in Charlotte has gone up since last month, and slightly up since last year. These housing market trends in Charlotte are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 17. Colorado Springs, Colorado Colorado Springs is also on the list of the best places to invest in rental real estate. Colorado Springs, Colorado is a vibrant city located at the base of the Rocky Mountains. With a growing population and strong economy, Colorado Springs offers a variety of opportunities for real estate investors. Here are some top reasons to consider investing in the Colorado Springs real estate market:
The market had a total sales-to-total listings ratio below 0.12, which favors sellers. On average, homes in Colorado Springs sell after 115 days on the market. The trend for median days on market in Colorado Springs is flat since last month, and slightly up since last year. These housing market trends in Colorado Springs are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 18. Denver, Colorado Denver, Colorado also makes the list of the best places to invest in real estate. Rentals in this city have been gradually increasing over the years. This consistent growth has been driven by a buoyant economy creating jobs. Tourism is also high, driving strong returns in the holiday rental market. Jobs are a major reason why people move to Denver in the first place. Denver is a bustling city that is quickly growing in popularity, attracting an influx of residents and businesses to the area. That explains why Denver is one of the top cities for in-migration, attracting people from all over the state as well as the country. With a thriving economy, stunning scenery, and a range of amenities, Denver is a great place to invest in real estate. Here are the top reasons why:
The market had a total sales-to-total listings ratio below 0.12, which favors buyers. On average, homes in Denver sell after 134 days on the market. The trend for median days on market in Denver has gone up since last month, and slightly up since last year. These housing market trends in Denver are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 19. Raleigh, North Carolina Raleigh is also on the list of best places to invest in rental real estate. Raleigh, North Carolina is a city on the rise, offering a thriving economy, a strong job market, and top-tier amenities. The Raleigh metropolitan area – the city and its surrounding suburbs – account for about one and a half million people. Raleigh offers a range of attractive qualities for real estate investors, including a strong job market, a growing population, affordable real estate prices, top-tier universities, a thriving cultural scene, access to outdoor recreation, and a growing tech industry. These factors make it a great location for real estate investors looking to capitalize on the city's potential for growth and maximize their returns. Here are some of the top reasons to invest in the Raleigh, North Carolina real estate market:
The market had a total sales-to-total listings ratio above 0.2, which favors sellers. On average, homes in Raleigh sell after 63 days on the market. The trend for median days on market in Raleigh has gone down since last month, and slightly up since last year. These housing market trends in Raleigh are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 20. Phoenix, Arizona Phoenix is also on the list of best places to invest in rental real estate. It is becoming a top destination for people living in high-cost areas like Los Angeles & Seattle. Phoenix is a rapidly growing city that has become an attractive market for real estate investors. With a strong and diverse economy, a growing population, and a range of amenities, Phoenix offers many opportunities for those looking to invest in real estate The Phoenix real estate market offers many opportunities for investors looking to capitalize on the city's strong economy, growing population, and range of amenities. With affordable housing, high rental demand, and a range of investment opportunities, Phoenix is a market worth considering for real estate investment. Here are the top reasons to consider investing in the Phoenix real estate market:
The market had a total sales-to-total listings ratio between 0.12 and 0.2, which favors none. On average, homes in Phoenix sell after 78 days on the market. The trend for median days on market in Phoenix has gone up since last month, and slightly up since last year. These housing market trends in Phoenix are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. 21. Seattle, Washington Seattle too makes our list of one of the best places to invest in real estate for those who can afford it. Seattle offers strong economic prospects and a buoyant labor market. This means that rental occupancies are expected to remain high. The city’s population has grown consistently over the last few years with families drawn to the city’s lifestyle. Housing prices have doubled in the past five years, growing twice as fast as the national average since 2016. Seattle’s tech landscape and real estate market are rapidly evolving. Google has upped the size of its new Seattle campus. Facebook has been on a hiring spree in the Seattle area, particularly for its virtual reality arm Oculus, which is growing fast in Microsoft’s backyard of Redmond. GeekWire reported on new HQ leases for top Seattle startups Rover and Outreach. Other companies continue to grow and that will pick up any slack. Tech has blown up Seattle. For the past 5 years, we have seen that this market has priced out many middle-class buyers. Despite the high cost of living, Seattle, Washington, remains a hotbed for real estate investment. The city's strong economy, growing job market, and attractive location make it an ideal choice for investors looking to capitalize on the city's steady growth. Overall, Seattle's strong economy, growing population, limited housing supply, high-quality education, attractive location, and stable market make it a top choice for real estate investors looking for a reliable and profitable investment opportunity. Here are the top reasons why investing in Seattle's real estate market may be a wise decision:
The market had a total sales-to-total listings ratio between 0.12 and 0.2, which favors none. On average, homes in Seattle sell after 75 days on the market. The trend for median days on market in Seattle has gone up since last month, and slightly up since last year. These housing market trends in Seattle are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. Now that you know where to invest in real estate, it's time to figure out how to do it properly. One of the best investments you can make is in income-producing rental properties, but only if you know what you're doing. We can help you succeed by avoiding risk and boosting profit by researching top real estate growth markets. Foreign Investment in US Real Estate: A Look at the Latest Data Foreign individuals and corporations are free to purchase residential or commercial real estate in the United States. Real estate is a global asset class, and foreign investment in the US real estate market has been an important source of capital for many years. The National Association of Realtors® (NAR) publishes an annual report on international transactions in US residential real estate to provide insights into the trends and patterns of foreign investment. Let’s take a closer look at the latest data. Dollar Volume of Foreign Buyer Residential PurchasesAccording to the NAR report, the dollar volume of foreign buyer residential purchases during April 2021-March 2022 was $59 billion, which is equivalent to 2.6% of $2.3 trillion of the dollar volume of existing-home sales. This indicates that foreign investment in US real estate continues to be significant. Number of Foreign Buyer Existing-Home PurchasesThe report also reveals that 98,600 foreign buyer existing-home purchases were made during April 2021-March 2022, which represents 1.6% of 6.06 million existing-home sales. This demonstrates that foreign buyers are still active in the US real estate market. Interestingly, the report found that 57% of foreign buyers who purchased US residential property were already residing in the United States. This includes recent immigrants (less than two years at the time of the transaction) or non-immigrant visa holders who reside for more than six months in the US for professional, educational, or other reasons. Top Foreign BuyersThe report also lists the top foreign buyers in the US residential real estate market. The top five countries are Canada (11% of foreign buyers, $5.5 billion), Mexico (8% of foreign buyers, $2.9 billion), China (6% of foreign buyers, $6.1 billion), India (5% of foreign buyers, $3.6 billion), and Brazil (3% of foreign buyers, $1.6 billion). Colombia also makes the list with 3% of foreign buyers and $1.0 billion. Implications for the US Real Estate MarketForeign investment has been a key driver of the US real estate market, and the latest data from the NAR report suggests that this trend is likely to continue. Foreign buyers are attracted to US real estate for a variety of reasons, such as economic and political stability, a strong rule of law, and a relatively low cost of living compared to other developed countries. These factors make the US an attractive destination for foreign investment. Furthermore, foreign investment can provide significant benefits to the US real estate market. For example, it can boost economic growth, create jobs, and increase demand for US goods and services. However, foreign investment can also have its downsides, such as driving up home prices and reducing housing affordability for US residents. In summary, the latest data on foreign investment in US real estate from the NAR report highlights the ongoing importance of foreign buyers in the US real estate market. While there are potential benefits and drawbacks to foreign investment, it is clear that the US real estate market remains an attractive destination for global capital. References:
 Report analyzes transaction volume, debt availability and asset pricing and identifies opportunities in the Americas, Asia, Europe. Hines, the global real estate investment, development and property manager, released its global outlook titled, “2023: Navigating Through the Labyrinth” today. Following the turbulence in 2022, opportunities will abound this year due to repricing, continued outperformance of high-quality office assets, and deflation in some key sectors. Global Chief Investment Officer David Steinbach said, “In a period of global economic discord, transaction volume will be unlocked with debt availability and the reset of pricing levels more in line with expected fundamentals. Successful acquisitions and developments in the new year will also focus on high quality assets that meet customer demands for simplicity and flexibility. We expect to see more accretive opportunities emerge in 2023.” Looking at global trends, the report reveals that mostly industrial and for-rent residential markets continued to have solid fundamentals. Retail fundamentals saw recovery from the damage caused by lockdowns, but high inflation in many markets is cutting into discretionary spending and is disrupting continued recovery. While short-term rates are expected to fall and long-term rates to remain sticky, the report outlines a few key areas as signs for investors to pivot strategies, including improvement in transaction volume, rising availability of traditional debt, and cost-averaging down (i.e., deploying capital patiently during a market disruption). Sectors in Our Sights Utilizing proprietary research tools to analyze market data, the report provides sector insights for the Americas, Asia, and Europe and suggests how real estate investment strategies should evolve this year: Americas Investors are still recalibrating their portfolios, as they have seen downturns on both the equity and fixed-income sides of their ledgers. Tenants have been reviewing their growth plans for the year ahead and pausing on new activity, however, there is potential for opportunities during the second half of the year, including:
Against the backdrop of this year’s macroeconomic and political headlines, the rebalancing of real estate product types has largely played out. Trends have indicated that the real estate industry’s main sectors may converge further. Opportunities exist in:
As we look at strategies for 2023, the ‘beds and sheds revolution’ of recent years has played out. There is no longer a standout winning sector. Our ability to understand nuances of quality within a product type has become more important than just picking the right general bucket. Opportunities will include:
Click here to read the report and watch a video from David Steinbach, global chief investment officer at Hines. About Hines Hines is a global real estate investment, development and property manager. The firm was founded by Gerald D. Hines in 1957 and now operates in 28 countries. We manage a $92.3B¹ portfolio of high-performing assets across residential, logistics, retail, office, and mixed-use strategies. Our local teams serve 634 properties totaling over 225 million square feet globally. We are committed to a net zero carbon target by 2040 without buying offsets. To learn more about Hines, visit www.hines.com and follow @Hines on social media. ¹Includes both the global Hines organization as well as RIA AUM as of June 30, 2022.   The last few years have witnes-sed a series of crises in the real estate market in general, but specifically in rental property. The COVID-19 pandemic, the hottest residential market in decades, and the recent rise in mortgage interest rates have all impacted the industry and affected the ways in which investors think and act. Nevertheless, things seem to be stabilizing in real estate at the moment, sending positive signals to all who consider investing in rental properties in the coming months.
With that in mind, let’s take a look at the five most important trends expected in 2023. 1. Recovery of the Short-Term Rental IndustryAlthough the pandemic had a major debilitating effect on the vacation rental industry, the slowdown was relatively short, and the market has already started recovering. The recovery is expected to continue during the remaining months of 2022. By 2023, short-term rentals are expected to have reestablished their position as the more profitable rental strategy when compared to traditional, long-term rentals. The most encouraging sign is the return to travel, the monthly travel expenditure in the U.S. surpassed the pre-pandemic level (April 2019) for the first time, by 3%. Short-term rentals are directly related to traveling. This means that as more people resume traveling, the demand for Airbnb-style rental properties will increase, allowing for higher daily rates and pushing up return on investment. If you are interested in this rental property strategy, you should focus on markets with strong Airbnb demand. According to nationwide analysis conducted by Mashvisor, a real estate data analytics company, these cities boasted the highest Airbnb occupancy rates in the U.S. market in the summer of 2022: Portland, Oregon (67.5%); Seattle, Washington (67.4%); Tucson, Arizona (67.3%); and San Francisco, California (66.9%). 2. Stronger Demand in Secondary and Tertiary MarketsThe second 2023 trend in the rental property investing industry is the continued growth of small, rural markets. The pandemic and the consequent switch to remote working across numerous industries affected the real estate market in major ways. One of the most significant changes to keep in mind as an investor is the massive move from primary markets like New York, Los Angeles, Boston, and Chicago to secondary and tertiary markets. Because work-from-home policies are expected to remain in many businesses, the trend to smaller markets is forecast to continue into 2023 and beyond. Many professionals and families prefer the peace, comfort, and security small towns and rural areas offer. Although some people might choose to buy a home, others will decide to rent, creating an opportunity for investors. For those considering investing in a long-term rental property, smaller markets will offer more demand and higher return. Importantly, such locations come with lower property prices, which makes them affordable even for new investors. 3. Growing Interest in Long-Term Airbnb RentalsAnother important trend the global pandemic stimulated is the emergence of a hybrid rental strategy that combines the benefits of investing in short-term and long-term rentals. As traveling nurses and other traveling professionals need temporary housing in various locations, we have seen a rise in long-term Airbnb rentals, also known as furnished apartments. From an investor’s perspective, this rental strategy provides higher rental income than traditional rental properties and more predictability and stability in terms of occupancy than vacation rentals. The combined result is optimized return on investment. As many people continue to work remotely, some will choose to travel to new locations for extended periods, which will further drive the growth of monthly furnished rentals in 2023. 4. Rise in Fractional Rental Property InvestingYet another major trend in recent years is fractional investing within the real estate industry. Technology has dictated this move rather than the pandemic. Real estate crowdfunding platforms like Fundrise, Realty Mogul, and Crowdstreet have allowed small-scale investors to own fractions of residential, commer-cial, and industrial properties together with other investors. The benefits this rental property investing strategy offers are numerous; being affordable and passive are the most important. As technology continues to advance in real estate, fractional investing is expected to accelerate in 2023 and beyond. 5. Technological AdvancementsFinally, we cannot talk about 2023 trends in rental property investing without discussing the role technology will play. High-tech will continue to be a main driving force in all aspects of the industry and all stages of the investor journey: from identifying profitable investment opportunities, to purchasing income properties, to renting out and managing both short-term and long-term rental properties. We can expect existing proptech companies to grow and new ones to appear in the next couple of years to meet all investor needs, making the real estate investing process even more seamless and profitable. In 2023, the rental market is expected to remain as dynamic as it has always been. There will be numerous lucrative opportunities for investing as long as investors analyze the market, use reliable data, and follow recent developments and forecasts. The five trends outlined here should help you make confident and profitable investment decisions. Daniela Andreevska is vice president of content at Mashvisor, a real estate analytics tool that helps real estate investors quickly find traditional and Airbnb investment properties. A research process that usually takes three months can now be accomplished in 15 minutes. CATEGORY: Article, Market & Trends TAGS: Trends KEY POINTS
 Residential villas on the waterside of the Palm Jumeirah in Dubai on Feb. 24, 2022. Russians were always among the top 10 nationalities investing in Dubai property, according to Tahir Majithia, managing partner at Dubai-based Prime Capital real estate. Christopher Pike/Bloomberg via Getty Images Wealthy investors betting on luxury real estate would do best by putting their money in Dubai or Miami next year, according to a new report.
In a ranking 25 of the world’s top luxury, or “prime,” real estate markets, Dubai topped the list, with prices expected to increase 13.5% in 2023, according to real estate consultancy Knight Frank. Miami ranked second, with prices expected to increase 5%. Dublin, Lisbon and Los Angeles followed, with 4% expected increases. The worst performers next year are expected to be Seoul and London, with prices expected to drop 3% for both. New York ranked in the middle of the pack, at 13, with prices expected to increase 2% next year. Still, even the strongest luxury markets are expected to cool next year, as interest rates rise and economies slow down, according to Knight Frank. Across the 25 cities, Knight Frank expects prices to rise by an average of 2% in 2023, revised down from the 2.7% Knight Frank projected six months ago. The revision suggests that the global wealthy, seemingly immune from inflation and economic slowdowns, are holding off on big real-estate purchases or becoming more discerning on price given rising interest rates. “Although prime markets are more insulated to the fallout from higher mortgage costs, they’re not immune,” the report said. “The transition from a seller’s to a buyer’s market is already underway across most prime residential markets.” Dubai saw prices soar by 50% in 2022, so the price increases for 2023 mark a substantial slowdown. Dubai has seen a surge in wealthy residents over the past year, driven largely by Russians looking for a safe harbor for their wealth, yachts and real estate amidst Western sanctions over the war in Ukraine. Prices for Dubai single family homes rose 13% in October, while overall sales volume jumped 73% over the previous year. Miami also remains a popular haven for the wealthy, given its low tax rates and growing number of financial firms locating their headquarters or offices in South Florida. Although New York’s expected 2% increase next year is down from 2022, many brokers forecast declining prices next year, especially in Manhattan. Knight Frank said New York will benefit from overseas buyers who are “seeking more, rather than less, exposure to the U.S. dollar as the Federal Reserve ramps up rates.” Singapore is the only Asian city in the top 10 and one of only four cities whose forecast has climbed in the past six months, according to the report. Singapore is benefitting from wealth flight from China, as rich Chinese citizens move their money – and often their families – to the island to avoid strict Covid lockdowns and a slowing economy. Cash will be king across the 25 markets, as buyers willing to pay all-cash will be more attractive to sellers, Knight Frank said. Political and economic volatility in many countries will also lead to a flight to safety in real estate, “pushing buyers to mature and transparent luxury markets.” Just a few months ago, homebuyers were competing in knock-down, drag-out bidding wars for modest homes that were selling for six figures over their asking prices. Now, sellers are rapidly dropping prices and doing whatever they can to attract even a single interested buyer. Call it the Great Real Estate Reversal. As mortgage interest rates have soared, making purchasing a home significantly more expensive, buyers largely have disappeared from the market. It’s not that they don’t want to close on a home; it’s that they can’t afford to do so anymore. Home sales are down, prices have fallen, and properties for sale are beginning to pile up. However, there are some real estate markets bucking the grimness that has overtaken the housing market in recent months. The Realtor.com® economic research team identified these metropolitan areas where sales and prices are anticipated to continue rising next year. These are the top housing markets of 2023. “They are very affordable markets. These are areas where your housing dollars really stretch further,” says Realtor.com Chief Economist Danielle Hale. “These places did not overheat during the [COVID-19] pandemic housing frenzy over the last two years. That puts them on more solid footing. Prices and sales still have more room to grow.” To come up with the list, Realtor.com looked at housing and economic data in the 100 largest metropolitan areas. (Metros include the main city and surrounding suburbs and smaller urban areas.)  These midsized metropolitan areas generally offer lower-priced homes that locals can still afford. All but one had median prices well under the national median of $417,000 in November because they didn’t experience the huge price spikes seen elsewhere during the pandemic. And buyers are still active in these areas, so sales are still happening. They also tend to have solid economies and are located near big employment centers. They aren’t the latest tech hot spots and are far from the flashier, larger cities on the coasts. Several of the top 10 had military installations, ensuring a steady stream of people moving in and out of the area. “These are the real estate markets that are going to be more active” next year, says Hale. “If you’re a seller, it means you can expect buyers. If you’re a buyer, you can expect competition. And if you’re a homeowner, you can expect prices to rise, which gives you more equity in your home.” The Realtor.com 2023 forecast anticipates that home prices will rise 5.4% nationally, a departure from the big run-ups experienced during the pandemic. The number of sales, which was high over the past few years, is expected to drop 14.1% next year. “They are really outliers, especially when it comes to sales,” Hale says of the top markets. So what are the top real estate markets of 2023? 1. Hartford, CT Median home list price in November 2022: $372,400 Price change in 2023: 8.5% Sales change in 2023: 6.5% Hartford has been bucking the slowdown happening in just about every other housing market. About 90 minutes southwest of Boston and 2.5 hours northeast of New York City, the state capital of Connecticut has seen home prices rising and the number of homes for sale dropping. The “Insurance Capital of the World” was named one of the hottest markets in the nation in October. Companies such as Aetna, The Hartford, and Cigna are all headquartered in the area. “We’re still getting people coming in from out of state,” says real estate broker associate Lisa Barall-Matt, of Berkshire Hathaway HomeServices New England. She’s based in West Hartford, a more suburban city just outside of Hartford proper. “Our [prices] are still attractive, but our market went up exponentially,” she adds. “We could handle it because we were so underpriced before the pandemic.” As more people can now work remotely, buyers from pricey places like New York City, Boston, and Washington, DC, logged the most out-of-the-area views of homes in the metro on Realtor.com in the third quarter of this year. Homes are still receiving multiple offers and going for more than the asking price. However, instead of 20 to 30 offers per property before selling for 20% over the list price, now homes are receiving about three to five offers, says Barall-Matt. And the days of six figures over the asking price are over. Homes are generally selling for 3% to 5% more than the list price. “Prices are still rising,” says Barall-Matt. “The supply is short, and pent-up buyer demand is high.” 2. El Paso, TX Median home list price in November 2022: $290,500 Price change in 2023: 5.4% Sales change in 2023: 8.9% El Paso, which sits at the western tip of Texas on the border of Mexico, is home to the U.S. Army installment of Fort Bliss. The constant movement of service people, affiliated companies, and contractors has helped to keep the local housing market brisk. That may help to explain why more than half of those looking at El Paso listings on Realtor.com came from outside of Texas. Two-thirds of shoppers were from outside the metro area. The most out-of-the-area views of listings came from Phoenix, Dallas, and Salt Lake City. Nearly 40% of buyers in the metro purchased their homes using all cash. About a quarter, 24.2%, used U.S. Department of Veterans Affairs loans. The VA loans are attractive because borrowers don’t have to put any money down to buy and can often score lower mortgage interest rates as well. Buyers looking for a deal can check out this four-bedroom, two-bathroom house with a carport near Fort Bliss for $141,588. Or they can look at this three-bedroom, two-bathroom house with a pergola out back for sale for $235,000. 3. Louisville, KY Median home list price in November 2022: $290,000 Price change in 2023: 8.4% Sales change in 2023: 5.2% The largest city in the state—home to the Kentucky Derby and Kentucky Fried Chicken—has emerged in recent years as a big manufacturing center. Those jobs, plus the low home prices and cost of living, have made it an appealing place for homebuyers. Nearly half of those looking at homes in the area were from other states, according to Realtor.com data. The area has some of the cheapest mansions in the nation for those looking for more space. It was also popular with investors during the pandemic, although that has since slowed as prices and mortgage rates have risen. Buyers can find this brick, three-bedroom, 1.5-bath ranch home with a large deck for $275,000. Those on tight budgets can check out this newly renovated two-bedroom, one-bathroom house for under $200,000. 4. Worcester, MA Median home list price in November 2022: $447,500 Price change in 2023: 10.6% Sales change in 2023: 2.5% Worcester has long been a significantly more affordable alternative to ultraexpensive Boston. Those lower home prices have made it a popular destination for cash-strapped families as well as investors. (Homes in the Boston area, about an hour east, were substantially higher at $739,900.) However, the market has slowed from its peak since mortgage rates shot up. The combination of the higher rates plus high home prices has made it financially untenable for many folks to become homeowners in the area. And the number of folks moving in from other parts of the country has dropped off, says local real estate broker Nick McNeil, of McNeil Realty. “For the first time in 10 years, I can no longer tell somebody it’s cheaper to buy a home than it is to rent,” says McNeil. “People who absolutely have to buy are buying whatever they can afford.” The typical Worcester buyer is looking at units in two-family homes or cheaper starter homes with lower price tags between $300,000 and $325,000, says McNeil. They’re often first-time buyers. “The people who are looking right now, a lot of them really can’t afford to buy,” he says. 5. Buffalo, NY
Median home list price in November 2022: $239,000 Price change in 2023: 6% Sales change in 2023: 6.3% The northern New York city, which sits on the banks of Lake Erie on the Canadian border, has been steadily on its way back up. The one-time manufacturing powerhouse fell on hard times when plants closed, but it has been undergoing a revitalization for years. It got a boost during the pandemic as more folks who could work remotely returned to the area. Like the rest of the country, the number of homes for sale fell and prices shot up. The real estate market now appears to be returning to something more normal, says real estate broker Ryan Connolly, of Re/Max Plus. Homes are sitting on the market longer, and sellers are cutting prices. Generally, prices in the metro area rise about 3% to 5% annually. “We’re going to go back to what we used to see a few years ago, which is a smaller increase in prices, not a big jump,” he says. Most of his buyers now are trading up to larger homes because they want more space. “Things have slowed right now, but I think that’s the time of year. Historically, we’re really, really slow once we hit Thanksgiving,” says Connolly. “But I have a number of people talking to me about purchasing next year, and their budgets are increasing.” 6. Augusta, GA Median home list price in November 2022: $318,900 Price change in 2023: 5.7% Sales change in 2023: 6.2% Augusta, about two hours east of Atlanta on the border of South Carolina, is known to linksmen as the home of the Masters Tournament. It’s also where Fort Gordon, and the U.S. Army Cyber Center of Excellence, is based. And Realtor.com recently named it one of the cheapest places in America to buy a home. While much of the rest of the country experiences a real estate slowdown, Augusta’s lower prices and the turnover generated from the U.S. Army installation are expected to keep the local real estate market busy. “We are still continuing to see [home] appreciation. But it’s not as drastic as it had been,” says Carmen Blanchard-Stitt, an associate broker at Meybohm Institute of Real Estate. “We’re still experiencing multiple-offer situations, [just] not near as bad as they were.” More than a third, 35.5%, of all purchases in the area were all cash. Nearly a quarter, 23%, were VA loans. VA loans don’t require a down payment. The sweet spot in the market is homes priced between $150,000 and $300,000, she says. Buyers are looking for everything from townhomes to single-family homes. “We see a lot of variety in what buyers are interested in,” says Blanchard-Stitt. 7. Grand Rapids, MI Median home list price in November 2022: $358,300 Price change in 2023: 10% Sales change in 2023: 1.6% Grand Rapids, a Midwestern city just east of Lake Michigan known for its brewery scene, was turbocharged during the pandemic as more local, college graduates decided to stick around and folks who grew up in the area and could now work remotely returned. But higher mortgage rates caused many buyers to hit the pause button. That’s beginning to change. “We were dead in the water, but in the last few weeks I have eight new buyer clients,” says local real estate broker Steve Volkers, of the Volkers Group. “All of them are first-time homebuyers who have been renting and don’t want to anymore.” He’s seeing a lot of parents of grown children move to Grand Rapids to be closer to their grandchildren. Many are either buying in all cash or making substantial down payments so their monthly mortgage payments are low. Local and first-time buyers have needed more time to accept that their monthly mortgage payments are going to be significantly higher than they were just a year ago due to those elevated mortgage rates. Many are coming to the realization that they’re going to have to purchase a smaller or older home than they had wanted. “They’re adjusting their needs to match their goal,” says Volkers. “First-time homebuyers can’t skip the starter house anymore.” 8. Columbia, SC Median home list price in November 2022: $300,400 Price change in 2023: 3.6% Sales change in 2023: 7.7% The capital of South Carolina, home to the University of South Carolina (go, Gamecocks!), is also located near a military base. About half of all soldiers are trained at nearby Fort Jackson. The military base, university, and lower home prices have helped to keep the housing market strong. About 14.5% of all purchases in the metro were made with VA loans, according to Realtor.com data, and 15.8% were made with FHA loans. Buyers can still find large homes for a reasonable price. This six-bedroom, four-bathroom house that is just under 3,000 square feet is on the market for about $300,000. Buyers looking to save some money can check out this brick, three-bedroom, one-bathroom house on nearly two-thirds of an acre for $150,000. 9. Chattanooga, TN Median home list price in November 2022: $396,500 Price change in 2023: 8.2% Sales change in 2023: 2.9% About two hours southeast of Nashville, the Tennessee city’s downtown has undergone a revitalization in recent years that has helped it to attract startups and other tech companies. The metro, the smallest on our list, is known for its outdoorsy lifestyle, popular with bass fishers and mountain climbers. The lower real estate prices in the area have made it an attractive destination for those looking for more square footage. It has plenty of larger, affordable homes for sale. About 35% of home sales in Chattanooga were all cash. This move-in ready, three-bedroom, 1.5-bathroom house is on the market for $230,000. This three-bedroom, three-bathroom house with a finished basement on three-quarters of an acre is for sale for $300,000. 10. Toledo, OH Median home list price in November 2022: $161,100 Price change in 2023: 6.7% Sales change in 2023: 4.2% Toledo, about an hour south of Detroit on the banks of Lake Erie, is the cheapest housing market on our list. Those low prices have lured out-of-state buyers and investors to the Midwestern auto and glass manufacturing city. “It’s slowed down since the rush,” says longtime local real estate agent Rick Turner, of Key Realty. However, “there are still buyers out here. The phones are still ringing.” About 35.2% of purchases in the metro are all cash. “We had such a large backlog of buyers this summer with these lower interest rates. Everybody was fighting over stuff,” says Turner. “Now the feeding frenzy is over. Sellers have to come to the realization that buyers are more selective, and they have to step their game up to be attractive to potential buyers.” Investors are still looking for properties priced between $50,000 and $150,000 that they can rent out, says Turner. Out-of-state buyers are in search of lower-priced properties. And locals are realizing it might be cheaper to pay a mortgage than their rent every month, so they’re jumping into the market. There are now more homes for sale in the Toledo metro area to choose from, but many buyers are struggling with high inflation, rising rents, and soaring mortgage rates. |
Author
|
RSS Feed