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September 29th, 2019 by Marco Santarelli
How is The Rochester Real Estate Market 2019?
Real estate market is growing in New York year-over-year. If you’re keen to invest in the Rochester real estate market in 2019 and buy before prices become out of reach, you must read till the end. If you’re going to New York state, most people assume you’re talking about New York City. If you brought up real estate investment in New York, the default assumption is also NYC.
However, the most famous and overheated real estate market is almost always the worst investment you could make. We suggest you look upstate at places like Rochester, New York instead. Rochester, New York is home to around 200,000 people. However, the Rochester housing market includes multiple suburbs.
The broader Rochester metro area is home to around a million people. Rochester itself sits on Lake Ontario. The area has experienced population decline since the 1960s but has leveled out. Rochester’s suburbs are seeing significant growth thanks to their top-ranked schools.
Is Rochester going to be one of the hottest real estate markets for investors in 2019 & 2020? Let’s take a deep look at the latest Rochester housing market trends to come to a conclusion.
Rochester Real Estate Market Forecasts 2019 & 2020
The real estate data from Zillow shows that the median home value in Rochester is $78,800. Rochester home values have gone up 12.3% over the past year. The median list price per square foot in Rochester is $59, which is lower than the Rochester Metro average of $111.
The median price of homes currently listed in Rochester is $89,900 while the median price of homes that sold is $77,600. The median rent price in Rochester is $1,150, which is lower than the Rochester Metro median of $1,300.
Rochester Housing Market Forecast 2019 – 2021
The Rochester housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The Accuracy of the Trend Prediction for Rochester is 78%. Accordingly, LittleBigHomes.com estimates that the probability for rising house prices in Rochester, NY is 78% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Rochester, New York Real Estate Market Forecast.
Rochester Real Estate Market Trends
The Rochester real estate market is heating up. On Trulia, the median sales price in Rochester is $137,900. Homes are selling for about $97/sqft. At present, Trulia has 1,051 resale and new homes for sale in Rochester, NY, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
In the past month, 600 homes have been sold in Rochester on Redfin.com. In addition to houses in Rochester, there were also 14 condos, 73 townhouses, and 169 multi-family units for sale in Rochester last month. As per their real estate data, the Rochester housing market is very competitive. The average sale price of a home in Rochester was $138K last month, up 6.2% since last year.
The average sale price per square foot in Rochester is $95, up 8.0% since last year. Many homes get multiple offers, some with waived contingencies. Homes in the Rochester housing market sell for about 1% above list price and go pending in around 9 days. Hot homes in Rochester, NY can sell for about 6% above list price and go pending in around 4 days.
There are 895 homes for sale in Rochester, NY on Realtor.com. 130 of which were newly listed within the last week. Additionally, there are 342 Rochester rentals for sale, up to $3K per month. According to Realtor.com’s data, in August 2019, the Rochester housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale.
In August 2019, the median list price of homes in Rochester, NY was $134.9K, trending up 7.9% year-over-year. The median listing price per square foot was $91. The median sale price was $142K. On average, homes in Rochester, NY sell after 64 days on the market. The trend for median days on market in Rochester, NY is flat since last month, and slightly down since last year.
The median list price in Rochester, NY is $122,400 on Movoto.com. The median list price in Rochester went up 6% from August to September. Rochester’s home resale inventories is 286, which decreased 1 percent since August 2019. The median list price per square foot in Rochester is $79. August 2019 was $78. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in September.
Rochester, NY Single Family And Multi-Family Homes
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the real estate company called Neigborhoodscout.com, the median house price in Rochester, NY is $89,270, which indicates that home prices in Rochester are well below the national average for all cities and towns in the United States. Single-family detached homes are the single most common housing type in Rochester, accounting for 44.83% of the city’s housing units.
Other types of housing that are prevalent in Rochester include duplexes, homes converted to apartments, large apartment complexes and a few row houses. The Rochester housing market is dominated by renter-occupied one or two bedroom apartments.
Currently, there are 419 single family homes for sale in Rochester, NY on Zillow. Additionally, there are 103 single family homes for rent in Rochester, NY. Under potential listings, there are about 19 Foreclosed and 184 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Rochester, NY Foreclosures And Bank Owned Homes 2019
As per the Rochester foreclosure data by Zillow, in Rochester 0.2 homes are foreclosed (per 10,000). This is the same as the Rochester Metro value of 0.2 and also lower than the national value of 1.2. The percent of delinquent mortgages in Rochester is 2.5%, which is higher than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of Rochester homeowners underwater on their mortgage is 8.2%, which is higher than Rochester Metro at 6.8%.
There are currently 2,499 properties in Rochester, NY that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 456. In August 2019, the number of properties that received a foreclosure filing in Rochester, NY was 47% higher than the previous month and 5% lower than the same time last year.
Best Neighborhoods to Invest in Rochester Rental Real Estate
About 60% of Rochester’s housing units are rentals. If you are looking to invest in the Rochester rentals, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Rochester rental real estate and you should be able flip it for a lump sum profit.
When looking to invest in Rochester real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Rochester investment property should be low. The neighborhoods in Rochester must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 84 elementary schools, 42 middle schools, 37 high schools and 50 private & charter schools in Rochester. There are 55 neighborhoods in Rochester.
Some of the best neighborhoods in or around Rochester, New York are 19th Ward, Maplewood, 14621 Community, East Irondequoit, West Irondequoit, Lyell Otis Avery, Mechanics, Changing of the Scenes, Downtown Rochester, El Camino, Rochester Terrace, Upper Falls, Homestead Heights, Corn Hill, and Beechwood.
Park Avenue has a median listing price of $300K, making it the most expensive neighborhood. People of Dutchtown is the most affordable neighborhood, with a median listing price of $40,000.
Here are the best neighborhoods to invest in Rochester rental real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).
Should You Invest in Rochester Rental Real Estate?
Now that you know where Rochester is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Rochester a good place to invest in real estate?
Many real estate investors have asked themselves if buying a rental property in Rochester is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Rochester housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Rochester but we have collected ten evidence based positive things for those who are keen to invest in the Rochester rentals in 2019.
Investing in Rochester rentals will fetch you good returns in the long term as the home prices in Rochester have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Rochester real estate market which can help investors who are keen to buy an investment property in this city.
We’ll focus on real reasons to invest in the Rochester real estate instead of giving you vague appeals to buy a house or an investment property because of general ambiance and mere promises of future growth.
1. The Relatively Affordable Real Estate
The average home in the Rochester housing market costs less than 80,000 dollars. Middle class suburban properties in suburbs like Brighton cost 100,000 to 200,000 dollars. This is well below the national average, though you’re in one of the most expensive states in the country.
An interesting aspect of the Rochester real estate market is the sheer number of small apartment buildings. Roughly a quarter of all residences are in small apartment buildings, while around a fifth are conventional large apartment buildings. This means that an investor could purchase an entire multi-family building to rent out for a million dollars or less.
2. The Room to Grow
The Rochester housing market is attracting people because it offers the large suburban lots, multi-acre properties and even waterfront homes that people want but can rarely afford. This has led to an influx into the area from more expensive housing markets, especially among young families who literally want space.
The city is also encouraging redevelopment. The city is fostering new apartment and condo construction, especially luxury properties. Most of this involves tearing down run-down units or industrial buildings and putting up better quality housing stock, not adding new livable units to the area that would eventually lower rents and/or property values.
3. The Rochester Property Appreciation Trends
The Rochester real estate market is seeing 7 to 9 percent appreciation, especially in the suburban neighborhoods. Homes in the 100,000 to 200,000 dollar range are selling in less than a month due to demand.
The redevelopment in downtown is increasing property values in the urban core, while the modest influx of families to the suburbs is driving up property values there. The combination of factors led to property values going up 12 percent in 2018.
The cumulative appreciation rate over the ten years has been 18.62%, which ranks in the top 40% nationwide. This equates to an annual average Rochester house appreciation rate of 1.72%.
4. The Relatively Low Property Taxes
New York is one of the most heavily taxed states in the United States. However, taxes are always relative. And a Rochester real estate investment comes with a lower tax bill. This is mostly due to lower property valuations instead of tax rates. Who has the highest property tax bill overall? New York City suburbs.
5. The Landlord Friendly Environment
New York City has rent control and an entire system that sides with renters over landlords. Making matters worse for property owners, NYC continues to move more in favor of renters. The Rochester housing market has been more favorable to landlords evicting tenants for failing to abide by the terms of the lease and removed people faster who weren’t paying their rent.
The city hasn’t had rent control, though it was being considered in 2019 when state level laws passed locking in NYC’s rent control laws.
6. How the Tax Climate Encourages Renting
People living in western New York pay a disproportionately high property tax bill based on the value of the property; the term for this is the effective tax rate. This prevents many from being able to afford a home and results in a larger than expected population of renters.
It also inflates the expenses a prospective home buyer must prove they can pay to be approved for a home loan, preventing some from being qualified by lenders. This explains why about a third of residents own their homes, while about two thirds rent, the opposite of the national situation.
7. How the Local Economy Creates Renters
The Rochester real estate market exists in an area formerly derided as the Rust Belt. It has seen a decline in population though leveled out, with many moving to the suburbs full of colonial homes instead of dense inner cities.
The population decline means that there is little new home construction, though older housing stock is torn down. This means that there will not be a wave of new construction to meet an increase in demand, while removal of blighted areas and deteriorating housing stock is abandoned.
That is understandable when you know that the average building is more than seventy years old. This is where existing, well-maintained older properties close to amenities and in walkable communities becomes more valuable.
There is also a dearth of rental properties relative to demand. Only 5 percent of properties are available to rent while more than half of the local residents are renters, though that ratio is skewed somewhat by the large student population in the Rochester housing market.
8. The Good Return on Investment
Rent for a 1 bedroom NYC apartment in the city center is roughly 3000 dollars a month. In the Rochester real estate market, the same unit would rent for roughly a thousand dollars.
A one bedroom apartment in New York City’s suburbs rents for about 2000 dollars, while a similar Rochester real estate investment property rents for about a thousand dollars.
What if you buy a Rochester real estate investment property with three bedrooms, the sweet spot for families? In NYC, it rents for between six and seven thousand dollars.
In the Rochester real estate market, it rents for around 1500 dollars. While the rent is one third to one quarter that of the NYC market, remember that the property prices in the Rochester housing market are up to a tenth as much.
This means you’re earning 200 to 300 percent more per 100,000 dollars invested in the property. That’s aside from the ability to diversify your Rochester real estate investment portfolio by buying several properties in different neighborhoods or suburbs of the city for the cost of one unit in NYC.
9. The Large Student Market
Another factor that pulls down the median age in the Rochester area is the large student population. The Rochester Institute for Technology is the most famous but far from the only one. Empire State College, St. John Fisher College and literally a dozen others round out the list.
It also means you could round out your Rochester real estate investment portfolio by owning several units or single family homes close to campuses that could be rented out to both students and locals.
10. The Population Momentum
Many of the hottest real estate markets in the U.S. are considered destinations for the childless creative types. However, a city without children has to import people to maintain its numbers. This is why San Francisco and New York either see people flee to the suburbs once they have children or leave the area altogether.
The Rochester real estate market enjoys a healthy population profile. Roughly a quarter of the population consists of children, and many are likely to remain due to the healthy job market. It also means that the Rochester housing market won’t crater if the job market weakens the way San Francisco collapses whenever the tech bubble bursts. Others choose to remain here because of the low cost of living.
Rochester Real Estate Investment
Maybe you have done a bit of real estate investing in Rochester, NY but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Rochester real estate investment opportunity would be a key to your success. If you invest wisely in Rochester rental real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Rochester rentals are, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Rochester, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Rochester, NY. The Rochester real estate market is stable, offering slow appreciation, affordable properties to outsiders and good returns.
It has strong, long-term potential that is only buoyed if NYC collapses. And this is one of the reasons why being everything the Big Apple isn’t is in your favor.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Rochester real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
Another good market to choose for investment is Chico, CA. The Chico real estate market provides strong rental returns, a favorable legal and tax climate, and near certain and significant property appreciation. These are among a few of the reasons to consider Chico real estate investment over “hotter” real estate markets due for a correction.’
The Chico real estate market is affordable when you compare it to the rest of California. The average property in the Chico housing market is selling for around 350,000 dollars. That is a hundred thousand dollars higher than the national average.
However, it is 150,000 cheaper than the average price of a home in Los Angeles. And you can buy three homes in the Chico real estate market for the price of one mid-market home in San Francisco. The Chico housing market is competitive with the more desirable Mount Shasta area.
The other best place to invest in real estate is Savannah, GA. The Savannah area is evolving from a small town to a regional services hub with a diversified economy. It is never going to be a booming metropolis like Atlanta, but that won’t prevent it from being a great real estate investment.
In fact, many people are moving here for the ideal balance between the small-town feel and great amenities like a world-class hospital and international airport.
The Savannah housing market is seeing significant appreciation due to strong demand and slower growing inventory. Property prices increased more than five percent in 2019. Prices are projected to increase nearly two percent in 2020.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Population momentum https://realestate.usnews.com/places/new-york/rochester https://www.timesunion.com/news/article/New-York-s-student-population-is-on-the-decline-13204269.php
Relatively lower taxes https://www.lohud.com/story/news/politics/politics-on-the-hudson/2019/04/04/these-new-york-counties-have-highest-property-taxes-america/3355868002
Affordable real estate https://www.bestplaces.net/city/new_york/rochester
Student market https://en.wikipedia.org/wiki/Rochester_Area_Colleges
Local economy https://www.bestplaces.net/housing/city/new_york/rochester
Room to grow https://www.newyorkupstate.com/homes/2019/06/the-hottest-real-estate-market-in-america-right-now-is-in-upstate-ny.html https://www.rochestercitynewspaper.com/rochester/downtown-rochesters-upward-climb/Content?oid=9917396
Landlord friendly https://www.nytimes.com/2019/06/12/nyregion/rent-regulation-laws-new-york.html https://www.jacobinmag.com/2019/06/new-york-housing-tenants-universal-rent-control https://www.wsj.com/articles/new-law-has-rochester-considering-rent-regulated-apartments-11567452990
Taxes encourage renting
Market Prices, Trends & Forecasts
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