About Marco Santarelli

Marco Santarelli is an investor, author, Inc. 5000 entrepreneur, and the founder of Norada Real Estate Investments – a nationwide provider of turnkey cash-flow investment property. His mission is to help 1 million people create wealth and passive income and put them on the path to financial freedom with real estate. He’s also the host of the top-rated podcast – Passive Real Estate Investing.

St. Louis Real Estate Market: Prices | Trends | Forecast 2021-2022

September 23, 2021 by Marco Santarelli

The St. Louis real estate market is hot. Homes are selling fast because inventory is low, creating a banner selling season for homeowners looking to move. While St. Louis real estate market remains more affordable than in many other metro areas, low inventory and strong demand are putting upward pressure on prices. However, the number of new listings in the St Louis market is outpacing the number of closed sales, a reversal of the trend we saw until recently.

As the report below shows, there were 2,311 new residential listings in August 2021 and 2,106 closed sales. There were 2,689 active listings, which equates to a 1.4-month supply based on the rate of home sales. Even with the increase in inventory, it remains low, and the trend reports are only for one month, so we need to give it more time and monitor the trend over the next few months before concluding that there is possibly a significant trend indicating a market shift.

St. Louis Housing Market Trends 2021 (Describes August)

The St. Louis housing market isn’t limited to the roughly 300,000 people who live in St. Louis, making this the second-largest city in Missouri, after Kansas City. Instead, the Saint Louis metro housing market includes 2.8 million people. It is a bi-state metropolitan area that completely surrounds and includes the independent city of St. Louis, the principal city. It includes parts of both Missouri and Illinois.

Single-family detached homes are the single most common housing type in St. Louis. One and two-bedroom single-family detached homes are the most common housing units in St. Louis. Other types of housing that are prevalent in St. Louis include large apartment complexes, duplexes, homes converted to apartments, and a few row houses. St. Louis has a mixture of owner-occupied and renter-occupied housing.

According to Redfin, the St. Louis housing market is very competitive. The median sale price of a home in St. Louis was $210K last month, up 5.0% since last year. The median sale price per square foot in St. Louis is $142, up 1.4% since last year.

Many homes get multiple offers, some with waived contingencies.
Homes in St. Louis receive 3 offers on average and sell in around 12 days.
Hot homes can sell for about 7% above the list price and go pending in around 5 days.
Homes sales went up 0.6% since last year.

St. Louis housing market is a seller’s market, which means there were roughly more buyers than there were active homes for sale. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. In St. Louis, the sellers have held good leverage in these negotiations in the past month. On average, they could sell homes for 102.2% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.

This report provided by MARIS covers residential real estate activity in the St. Louis REALTORS® service area. Percent changes for August are calculated using rounded figures.

St. Louis Housing Demand & Prices

Median Sales Price increased 6.8 percent to $260,000 for Residential homes.
Median Sales Price decreased 0.4 percent to $184,200 for Townhouse/Condo homes.
Average Sales Price increased 6.8 percent to $327,607 for Residential homes.
Average Sales Price increased 9.3 percent to $240,910 for Townhouse/Condo homes.
Days on Market decreased 37.8 percent for Residential homes and 41.9 percent for Townhouse/Condo homes.
Housing Affordability Index increased 2.9%.

Housing Supply

New Listings increased 2.5 percent for Residential homes and 14.0 percent for Townhouse/Condo homes.
Inventory decreased 22.1 percent for Residential homes and 20.1 percent for Townhouse/Condo homes.
Months Supply of Inventory decreased 30.0 percent for Residential homes and 34.6 percent for Townhouse/Condo homes.
The current Months Supply of Inventory for Residential homes is 1.4, which indicates a seller's market.
It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.

Housing Sales

Closed Sales decreased 5.8 percent for Residential homes but increased 2 percent for Townhouse/Condo homes.
Pending Sales decreased 1.4 percent for Residential homes and 0.8 percent for Townhouse/Condo homes.

St. Louis Rental Market Trends

The average rent for a 1-bedroom apartment in St. Louis, MO is currently $950. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in St. Louis increased by 9% to $850. The average rent for a 1-bedroom apartment increased by 2% to $950, and the average rent for a 2-bedroom apartment decreased by -4% to $1,200.

The average rent for a 2-bedroom apartment in St. Louis, MO is currently $1,200, a 7% decrease compared to the previous year.
The average rent for a 3-bedroom apartment in St. Louis, MO is currently $1,573, a 5% increase compared to the previous year.
The average rent for a 4-bedroom apartment in St. Louis, MO is currently $1,350, a 15% decrease compared to the previous year.

St. Louis Housing Market Trends — Infographic Courtesy of St. Louis REALTORS®

St. Louis Real Estate Market Forecast 2021-2022

Let us look at the real estate data for St. Louis from various sources. Is the St. Louis housing market shaping up to continue the trend of the last few years as one of the hottest markets in the nation? Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since Sep 2011, the typical home value in Saint Louis County has appreciated by around 58%. The typical value of homes in Saint Louis is currently $240,302.

It indicates that 50 percent of all housing stock in the area is worth more than $240,302 and 50 percent is worth less (adjusting for seasonal fluctuations). ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The supply is exceeding the demand, giving purchasers an advantage over sellers in price negotiations. In other words, there are more homes for sale than there are buyers in the marketplace. St. Louis is a seller's real estate market – which means there are a lot of qualified buyers in the marketplace and not enough homes for sale in the market.

St. Louis County home values have gone up 17.5% (current = $240,302) over the past year and will continue to rise over the next twelve months.
St. Louis City home values have gone up 15% (current = $161,038) over the past year and will continue to rise over the next twelve months.

Here is St. Louis, MO real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 10% until Aug 2022.

St. Louis Real Estate Market — Graph Credits: Zillow.com

St. Louis Real Estate Investment Overview

Is St. Louis a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying a property in St. Louis is a good investment? If you want to find out whether St. Louis real estate is a good investment or not, you need to drill deeper into local trends. The St. Louis real estate trends will tell what the market holds for the years 2021 & 2022. We have already discussed the St. Louis housing market forecast.

St. Louis is most famous for the Gateway Arch built in the 1960s. Alternately looked down on as a Rust Belt city and part of flyover country, it doesn’t generate much attention except when its crime rate or other problems hit the news. However, the St. Louis real estate market holds significant potential. Purchasing an investment property in St. Louis real estate is a little different from shopping for your car or primary residence.

While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the St. Louis real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in St. Louis that you might move into or sell at retirement in the future!

Either way, knowing your profit potential and purpose is the first thing to consider. Let’s take a look at the number of positive things going on in the St. Louis real estate market which can help investors who are keen to buy an investment property in this city. We’re not going to list major tourist attractions and use that to say you should buy property here, whether to live in or rent out. Instead, here are some of the top reasons to invest in the St. Louis real estate market.

Its Overall Affordability for Investors

The St. Louis real estate market has one other thing going for it: affordability. Taking into consideration both the average household income and the cost of homes in the area, St. Louis continues to be one of the most affordable markets in the country. The median home price in St. Louis City is roughly $160,000. A general trend is a price of $105 to $120 per square foot. You can find many single-family homes for sale for less than $100,000; this market is notable for the sheer number of two-bedroom homes that attract empty-nesters, single parents, and small families. If you take St. Louis county into account, the median home value is around $260,000.

Affordable and upscale are relative terms. Some of the most desirable real estate markets in St. Louis are surprisingly affordable to outside investors. The median price of homes in the “expensive” 63103 zip code is barely under half a million dollars. The tony 63105 zip code hovers around the half-million mark, too. You have to move far out to suburban zip codes like 63124 to find median listings past the $700,000 mark. Note that this is cheaper than a cheap condo in hot California or New York markets. You could buy two luxury homes in the St. Louis housing market for less than one in hot coastal markets.

The Market’s Price Stability

The St. Louis real estate market has seen strong appreciation over the past three years, finally bringing them out of the low prices they’ve suffered through the Great Recession that only ended two years ago. In the last twelve months, St. Louis's appreciation rate has been 8.11%. In the latest quarter, NeighborhoodScout's data shows that house appreciation rates in St. Louis were at 2.19%, which equates to an annual appreciation rate of 9.05%.

Relative to Missouri, our data show that St. Louis's latest annual appreciation rate is lower than 60% of the other cities and towns in Missouri. Yet the market isn’t expensive. This suggests that those who buy in this relatively cheap market could enjoy reasonable price increases over time without worrying if they’re buying before a bubble bursts or if their investment will go down in value.

The True Bargains Are Abundant

A large number of vacant homes in the St. Louis real estate market, estimated at 20%, presents an excellent opportunity for those who want to buy, rehab, and rent out properties. When you factor in the suburbs, the vacancy rate is still around 6%. St. Louis also has a larger than the average number of distressed and underwater homes. In the U.S., roughly 1.5% of mortgages are delinquent. In St. Louis, the rate is 2.2%. Around 10% of homes have negative equity, while that rate exceeds 15% in St. Louis. You’ll be able to find vacant homes, distressed sellers, and foreclosures at bargain-basement prices here that you can renovate and rent out or sell throughout the St. Louis real estate market.

The Massive Renter’s Market

Around a third of the U.S. population rents. In the downtown St. Louis real estate market, nearly 60% of residents rent, and the rate is around a fifth when you include those in the suburbs. This is a huge rental market that you can take advantage of. Unlike college towns, your ability to find renters doesn’t depend on the popularity of the local college, nor will the value of the property depend on proximity to a particular school. College towns have a large proportion of renters, but you’re fighting with other investors to find properties to rent out to students.

St. Louis’ student market is fairly scattered due to the sheer number of universities. Yet it is large enough to present an opportunity for those who want to rent to students. Traditional universities in and around St. Louis include Blackburn College, Greenville University, Missouri Baptist University, St. Louis University, the University of Missouri – St. Louis campus, Washington University in St. Louis, and the Southern Illinois University Edwardsville campus. On top of this are various technical schools, seminaries, Bible colleges, and junior colleges.

Missouri is more landlord-friendly than other states in the area, notably Illinois. For example, it is much easier to evict someone who doesn’t pay their rent than surrounding states. In Missouri, you can file to evict if they’re just a few days late with the rent. There are protections for tenants, especially regarding security deposits. All of this is aside from the fact that the St. Louis real estate market has far more multifamily housing stock than other Midwestern markets.

Depending on the source, median rents range from $900-1000 a month in St. Louis and $1100 a month in the surrounding suburbs. Imagine buying a rental property for $50,000 and renting it out for $500-$1000 a month. You can rent out a studio apartment for $500 a month and a two-bedroom for $800. The rare four-bedroom apartment or house commands more than $1200 a month. It is hard to beat that ROI without risking your money buying liens and hoping you can secure a property. Because of the city’s age, you can find many older apartment buildings and apartment complexes at a reasonable price and rent them out at a decent rate.

The Known Redevelopment Opportunities in St. Louis

One of the benefits of master-planned redevelopment is that you know where real estate prices are going to go up due to renewed interest. The Garment District is slated for redevelopment, replacing the empty industrial buildings with homes and workspaces for creative types and new technology companies. The “New Northside” project wants to redevelop the entire north side of St. Louis. That project includes 1500 acres that border downtown St. Louis. Chippewa Park in south St. Louis is also targeted for redevelopment, too.

That renovation includes apartment homes and industrial space. St. Louis is old enough to have aging inner-ring suburbs. You can find redevelopment opportunities in suburbs like University City, home to Washington University in St. Louis. About 800 acres are slated for redevelopment in University City. Wellston is receiving funds from HUD specifically for redevelopment.

Summary

If you are looking to invest in St. Louis real estate, you should know the best places to invest in. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. Demand would raise the price of your St. Louis investment real estate and you should be able to flip it for a lump sum profit.

A cheaper neighborhood in St. Louis might not be the best place to live in. A cheaper neighborhood should be determined by this factor – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. When looking to invest in St. Louis real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing a St. Louis investment property should be low.

The neighborhoods in St. Louis must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. St. Louis is a moderately walkable city.

Some of the best neighborhoods in Saint Louis, Missouri are Oakville, University City, Webster Groves, Clayton, The Hill, Central West End, Downtown St. Louis, Fox Park Historic District, Shaw Historic District, Shrewsbury, Richmond Heights, Lafayette Square, Maplewood, Dogtown, Benton Park Historic and Tower Grove East.

Central West End is an upscale neighborhood in St. Louis. It has everything from sidewalk cafes, smart Italian and Asian fusion restaurants, chic boutiques, and antique stores. Located just 10 minutes of drive from downtown, the Central West End is nestled between Forest Park and the Saint Louis University campus. Gravois Park is an affordable neighborhood in St. Louis.

Roughly bounded by Jefferson Avenue, Chippewa Street, Grand Boulevard, and Cherokee Street, the living in Gravois Park offers residents an urban and suburban mix feel. In Gravois Park, there are a lot of bars, restaurants, coffee shops, and parks. Gravois Park neighborhood is a diverse mix of homeowners, renters. Most residents in Gravois Park rent their homes, therefore, investing in a rental property here could prove to be a lucrative income model.

Here are a few good neighborhoods in the Saint Louis real estate market which have experienced the highest appreciation rates (List by Neigborhoodscout.com).

St Louis College of Pharmacy / S Vandeventer Ave
S Vandeventer Ave / Mcree Ave
S 39th St / Lafayette Ave
City Center
Dr Martin Luther King Dr / N Garrison Ave
Harris-Stowe State U / Market St
Cherokee St / Missouri Ave
Tower Grove
Arsenal St / S Compton Ave
S Jefferson Ave / Arsenal St

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 areas, 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.

Similarly, don’t let the country-western touristy image dissuade you from investing in Nashville, TN. There are several points in favor of the Nashville real estate market if you are looking for a solid opportunity. One of the best features of the Nashville real estate market is the median property price in the city, which is considered more affordable than most of the other top markets for investing in real estate in the U.S.

Although the Nashville real estate market is expected to move a little more slowly in 2022, which would make things better for buyers, the inventory will remain limited, which means that Nashville will remain among the fastest-moving housing markets in the U.S. Also, as the mortgage rates remain at record lows, it makes buying a property more affordable now than it was in the previous years.

Another housing market in Texas to go for diversifying your investments is the Austin housing market. The Austin housing market may be one of the more expensive ones in the state of Texas, but it stands out for its large rental market and high rental rates. It is an excellent place to invest in real estate in the Lone Star State. It may be the second most expensive housing market in the state with a typical home value of around $595K, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.

Remember, caveat emptor still applies when buying a property anywhere. Some of 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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References

Market Prices, Trends & Forecasts
https://www.zillow.com/saint-louis-mo/home-values/
https://www.stlrealtors.com/pages/housingreport/
https://www.redfin.com/city/16661/MO/St-Louis/housing-market
https://www.zumper.com/rent-research/st-louis-mo
https://www.neighborhoodscout.com/mo/st-louis/real-estate#description
https://www.realtor.com/realestateandhomes-search/Saint-Louis_MO/overview

Neighborhoods
https://explorestlouis.com/things-to-do/neighborhoods/central-west-end/
https://www.homesnacks.net/cheapest-neighborhoods-in-st-louis-mo-1220885/
https://www.niche.com/places-to-live/n/gravois-park-st-louis-mo/

Redevelopment
http://www.northstl.com
http://news.stlpublicradio.org/post/university-city-leaders-try-reassure-residents-business-owners-about-redevelopment-plan#stream/0
https://nextstl.com/2016/12/wellston-first-aims-reinvent-struggling-historic-inner-ring-suburb https://fox2now.com/2018/05/22/downtown-st-louis-announces-next-phase-in-redevelopment-of-garment-distrrict

Landlord friendly
https://www.rentapplication.com/missouri-landlord-tenant-laws
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters

Houston Real Estate Market: Prices | Trends | Forecast 2021-2022

September 22, 2021 by Marco Santarelli

We will discuss the latest Houston housing market trends. After a 13-month run of positive sales volume in the Houston housing market was abruptly ended in July, August saw a return to increased sales volume. Single-family home sales and total property sales registered gains versus last August. Pending sales, a forward-looking indicator of closed sales in one to three months, increased by 8.9 percent. Single-family home sales in the greater Houston region increased 8.5 percent in August as 9,890 units sold versus 9,118 in August 2020.

According to HAR, while it was expected that the Houston housing market would ease now that summer is over, inventory levels are still extremely low, albeit improving. However, it was not anticipated that the market would ease so quickly. “There are not nearly as many competitive bids on property listings as we saw earlier this year, which drove prices to record levels in June,” said HAR Chairman Richard Miranda.

Single-family homes inventory reached a 1.9-months supply in August. While that is down from 2.6 months a year earlier, that is the biggest supply of homes the market has had in 2021 and reflects a 10.9 percent increase in new listings. The time required to sell a home was nearly halved in comparison to August 2020. The number of days on market (DOM) decreased from 51 to 26. Inventory levels stood at 1.9 months, down from 2.6 months a year ago. That level is the highest for 2021.

Home prices are soaring amid low inventory and low interest rates. The single-family home average price increased 14.0 percent to $380,233 while the median price jumped 15.2 percent to $310,000. These prices are lower than the record high set in June 2021. Some buyers are hitting the market to find they can't compete with all-cash offers.

Houston Housing Market Trends 2021 (Describes August)

Houston Real Estate Market — Data by HAR. The forecast is an estimate by Zillow.

After a 13-month run of positive sales in Houston, August saw a return of increased volume, with inventory levels improving and prices moderating while remaining higher than last year. An influx of new listings and strong buyer demand aided these trends. Its volume could not match the unprecedented surge of closings in July 2020 due to COVID-related market disruptions.

The August 2021 Market Update from the Houston Association of Realtors shows an 8.5% increase in single-family home sales to 9,890 units sold. 9118 sales in August 2020. Year-to-date, local home sales are 17.4% ahead of last year's record. Sales of all property types rose 9.2 percent year-over-year, totaling 12,036. Total dollar volume for August shot up 26.7 percent to $4.3 billion.

The sales volume of homes priced between $500,000 and $750,000 increased 48.5 percent year-over-year. Then came the $250,000-$500,000 range, up 31.8 percent. Luxury homes priced at $750,000 and up saw a 30.5 percent increase in sales. The average price of a single-family home rose 14.0% to $380,233, and the median rose 15.2% to $310,000. Prices have cooled since June's record highs.

The total number of active listings — or the total number of available properties — decreased 14.4 percent year over year. August saw a 1.9-month supply of single-family homes. With a 10.9 percent increase in new listings, the market now has a 2.6 month supply of homes. The June ‘Close to Original List Price Ratio' for single-family homes was 100.3 percent, with most buyers paying above list price. It was 100.2 percent in July but fell to 99.6% in August, confirming reports that the high-dollar buying trend is cooling.

The HAR's most recent report on the Greater Houston Area Housing Market is available below. It analyses important housing indicators across the Greater Houston region between August 2021 and August 2020.

Single-family home sales rebounded from July’s declines with an 8.5 percent increase, as 9,890 units sold versus 9,118 in August 2020.
The Days on Market (DOM) figure for single-family homes fell from 51 to 26;
Total property sales rose 9.2 percent with 12,036 units sold;
Total dollar volume increased 26.7 percent to $4.3 billion;
The single-family average price increased 14.0 percent to $380,233;
The single-family median price rose 15.2 percent to $310,000;
Single-family homes months of inventory registered a 1.9-months supply, down from 2.6 months year-over-year and below the national inventory of 2.6 months;
On a year-to-date basis, single-family homes sales are running 17.4 percent ahead of 2020’s record pace.
Townhome/condominium sales jumped 27.1 percent with the average price up 9.5 percent to $237,473 and the median price up 14.3 percent to $200,000;
Single-family home rentals fell 10.2 percent with the average rent up 9.6 percent to $2,153;
Townhome/condominium leases rose 1.8 percent with the average rent up 6.9 percent to $1,765.

There are the housing sales broken out by different price segments:

$1 – $99,999: decreased 32.4 percent
$100,000 – $149,999: decreased 33.5 percent
$150,000 – $249,999: decreased 26.6 percent
$250,000 – $499,999: increased 31.8 percent
$500,000 – $749,999: increased 48.5 percent
$750,000 and above: increased 30.5 percent

Houston Housing Market Trends — Source: Har.com

The Houston Housing Market's Performance in the Previous Year

Despite the pandemic, 2020 was a record-breaking year for the Houston real estate market. A record-breaking $35.3 billion worth of properties were sold (dollar volume). Single-family home sales surpassed 2019’s record volume by more than 10 percent. According to HAR’s 2020 annual market report, sales of all property types for the year totaled 115,523, an 11.6% increase over 2019’s record volume and marks only the second time in history that total property sales broke the 100,000 level.

A record-high average price of $347,164 and a record-high median price of $273,443 were achieved in December. The Houston real estate market ran much ahead of 2019’s record pace. The average amount of days a home stays on market even shortened from an average of 59 days to 46 days. According to local agents, nothing stays on the market for long as buyers are buying homes at a fast pace by taking advantage of the record low mortgage rates. Record-low mortgage rates and a dearth of homes for sale are two key reasons that help explain why the Houston houisng market will be booming in 2021 as well.

Houston Real Estate Market Forecast 2021-2022

Looking at the current statistics, what are the Houston real estate market predictions? Let us examine the price trends recorded by Zillow over the past few years. Houston has a track record of being one of the best long-term real estate investments in the U.S. Since Sep 2011, the Houston home values have appreciated by nearly 91.2% — Zillow Home Value Index.

ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Houston is currently $231,326. It indicates that 50 percent of all housing stock in the area is worth more than $231,326 and 50 percent is worth less (adjusting for seasonal fluctuations). In Sep 2020, the typical value of homes in Houston was around $200,000. Houston home values have gone up 16.5% over the last twelve months.

NeighborhoodScout.com's data also shows that Houston real estate appreciated by nearly 60% over the last ten years. Its annual appreciation rate has been averaging 4.83%. This figure puts it in the top 20% nationally for real estate appreciation. During the latest twelve months, the Houston appreciation rate was nearly 4%, and in the latest quarter, the appreciation rate was 0.5%. If it remains steady, it annualizes to a rate of 2.03%.

The forecast by Zillow also points in the same direction — a rise in home values over the next 12-months. This indicates that the prices will continue to rise in 2021. Hence, now is a good time to buy a house in Houston. There exists a limited supply of homes in Houston, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.

In other words, based on the last latest key housing market indicators, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. Houston is a seller’s market so watch for upward pricing pressure in the near future if the trend continues.

Clearly, for the long-term investment, you cannot ignore underestimate Houston. Investing in a rental property for the long-term would build your equity and also generate cash flow through rental income. If you want to increase your cash flow in 2021, you will find great deals in the Houston real estate market.

Here is Zillow's home price forecast for Houston, Harris County, and Houston – The Woodlands-Sugar Land. The Zillow Home Value Forecast (ZHVF) is the one-year forecast of the Zillow Home Values Index (ZHVI). ZHVF is created using all homes, mid-tier cut of ZHVI and is available both raw and smoothed and seasonally adjusted.

Houston-The Woodlands-Sugar Land Metro home values have gone up 16.8% over the past year and the latest forecast is that they will rise 12.3% in the next twelve months.
Houston home values have gone up 16.5% (current = $231,326) over the past year and will continue to rise at a similar pace due to the tight supply of houisng.
Harris County home values have gone up 16.7% (current = $243,286) over the past year and will continue to rise over the next twelve months from now.

Here is the graphical representation of how Houston home prices have grown from 2011 and their forecast until August 2022.

Houston Real Estate Market Forecast — Courtesy of Zillow.com

The highest annual change in the value of houses in the Houston Real Estate Market was 18% in the twelve months ended with the 1st Quarter of 1982. The highest growth in home values in the Houston Real Estate Market over three years was 28% in the three years ended with the 3rd Quarter of 2015. The worst annual change in home values in the Houston Market was -10% in the twelve months ended with the 3rd Quarter of 1987, according to LittleBigHomes.com.

OUR TAKE ON THE HOUSTON HOUSING MARKET OUTLOOK FOR 2021

Houston has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.

According to many experts, Houston has been in seller mode for several years now and there’s no reason to think that will change in 2020. With a record no. of sales in 2019, the Houston housing market was off to a big start to 2020. Home sales experienced a double-digit gain in February 2020 despite the local economy being in bad shape due to plunging oil prices.

Oil prices have a big impact on Houston's housing market. As oil prices plunge, it could mean a potential slowdown for Houston’s economy. Keeping aside the oil prices, the Houston Real Estate Market forecast for 2021 is still on the positive side. Although the desire to own a home remains strong, the combination of higher home prices and rising mortgage rates was making it increasingly difficult for many first-time buyers to afford one. Houston and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term.

In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Houston can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Houston real estate market remains strong and skewed to sellers, due to a persistent imbalance in supply and demand.

Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. While the rapid real estate appreciation Houston witnessed earlier in the decade has slowed, the combination of a strong economy, low unemployment, and a lack of inventory in many market segments continues to push home prices in Houston.

Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Houston (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.

Houston Rental Market Trends 2021

Before the pandemic, the average rent for an apartment in Houston was $1,118, a 2% increase compared to the previous year, according to RENTCafe. The average size for a Houston, TX apartment is 880 square feet with studio apartments being the smallest and most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage. 48% of the households in Houston, TX are renter-occupied while 52% are owner-occupied. More than 80% of the apartments in Houston fall in the price range of $500 – $2.8K.

The Zumper Houston Metro Area Report analyzed active listings in August 2021 across 7 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Texas one-bedroom median rent was $1,032 last month. Spring was the most expensive city with one-bedrooms priced at $1,120 while Huntsville ranked as the most affordable city with one-bedrooms priced at $570.

The Fastest Growing Cities For Rents in Houston Metro Area (Year-Over-Year)

Huntsville had the fastest-growing rent, up 18.8% since this time last year.
Conroe saw rent climb 4.2%, making it second.
Pasadena was third with rent increasing 2.6%.

The Fastest Growing Cities For Rents in Houston Metro Area (Year-Over-Year)

Huntsville saw rent jump 5.6% last month, making it the fastest-growing.
Galveston rent grew 4.4%, ranking as second.
Pasadena saw rent climb 2.6%, making it third.

Houston Rental Market Trends — Credits: Zumper

As of September 22, 2021, the average rent for a 1-bedroom apartment in Houston is currently $1,207. This is a 10% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Houston increased by 5% to $1,278. The average rent for a 1-bedroom apartment increased by 10% to $1,207, and the average rent for a 2-bedroom apartment increased by 9% to $1,519.

Two-bedroom apartment rents average $1,519 (a 13% increase from last year).
Three-bedroom apartment rents average $1,795 (a 9% increase from last year).
Four-bedroom apartment rents average $2,050 (a 14% increase from last year).

Some of the most affordable neighborhoods where the asking prices are below the average Houston rent:

East Little York, where the average rent goes for $530/month.
El Dorado – Oates Prarie, where renters pay $579/mo on average.
Acres Home, where the average rent goes for $599/mo.

Impact of COVID-19 on The Houston Housing Market

2019 was a strong year for Houston’s real estate market. Single-family home sales, total property sales, pricing, total volume, and inventory all increased year-over-year from 2018. The median sale price rose 4.7% from 2018 to $244,000. According to Realtor.com's pre-pandemic forecast, the Houston-The Woodlands-Sugar Land, Texas was expected to see a 0.3% growth in sales and 0.2% in home prices in 2020.

The home prices were expected to flatten nationwide, increasing by just 0.8% and buyers were expected to continue to move to affordability, benefiting mid-sized markets. According to the Bloomberg report on Houston Real Estate Market – “Far from declining, the Houston home prices and rents are expected to rise given the sudden housing shortage. Out-of-state investors have even started to swoop in to acquire damaged homes to repair and sell or rent.”

As was expected the Houston housing market started well as we entered into 2020. Sales of single-family homes went up by around 14% in January as compared to the previous year, a big start to 2020 that was driven by low mortgage rates and demand for homes priced between $250,000 and $750,000.

The median sold price rose by 4.5 percent to $234,000 and the average price climbed 4.6 percent to $291,034. Home sales experienced another double-digit gain in February 2020 as buyers came out in droves to take advantage of low mortgage rates. Total dollar volume for March jumped 11.0 percent to slightly more than $2.6 billion.

Then came the pandemic which interrupted the real estate sector in this region. Before April, home sales had been outpacing 2019’s record volume as consumers took advantage of historically low-interest rates. Home sales starting declining from April onwards as the Coronavirus pandemic gripped the nation. After a stellar performance in February, the month of March saw very little disruption in the real estate activities.

According to HAR, Houston home sales were more than 11 percent ahead of the levels at this point in 2019. Buyers were taking advantage of historically low mortgage interest rates through the first half of the month. 7,566 single-family homes were sold in March compared to 6,995 a year earlier, accounting for an 8.2 percent increase and the ninth consecutive month of positive sales.

The single-family home median price rose by 4.1 percent to $249,900, and the average price rose by 3.8 percent to $309,785. Both figures represent the highest prices ever for March. Sales of all property types totaled 8,965, up 6.9 percent from March 2019. Inventory of single-family homes was at a 3.5-months of supply, down from 3.8 months last March.

Impact of COVID-19

This housing market was impacted by the pandemic and slumping oil prices which led to a decline in home sales. Single-family home sales saw a double-digit drop of 19.1 percent in April with 6,199 units sold throughout greater Houston compared to 7,666 a year earlier. Prices remained unaffected.

The median price reached the highest level ever for April, increasing 2.4 percent to $251,000. Inventory of single-family homes was at 3.6-months of supply, down from 3.9 months last April.

Houston home sales fell for a second straight month in May due to the impact of COVID-19. The steepest decline was seen in the most affordable and the most expensive segments. Homes priced below $100,000 dropped more than 37 percent while those priced above $750,000 dropped more than 56 percent.

In May, single-family home sales fell with a year-over-year decline of 20.2 percent, marking the second straight month of declines. The new listings have also declined. The inventory of single-family homes shrank to 3.5-months of supply in May versus 4.1-months a year earlier. The Days on Market (DOM) figure for single-family homes grew from 54 to 58 days.

Total dollar volume dove 25.9 percent to $2.23 billion. The average price of single-family homes fell from 7.4 percent to $298,199, the first decline since January 2018. The median price was remained unchanged at $249,000. Townhome/condominium sales dropped by 36.0 percent. The average price of condos was down 2.3 percent to $206,146. The median price was up 2.9 percent to $175,000.

A huge number of homes went under contract in May after COVID-19-related stay-at-home orders expired which led to a surge of closings in June. Home sales in the Houston housing market were back up to levels considered to be normal for the summer buying season.

Homes priced between $250,000 and $500,000 led the way among all housing segments, soaring 28.3 percent year-over-year. The second-best performer consisted of homes in the $500,000 to $750,000 range, which jumped 18.6 percent, according to H.A.R.

Just like the previous month, closed sales were up by 22.2 percent for the week ending July 6 fueled by the increase in listings that went under contract in May and June. However, the fear of pandemic and its impact on real estate sales is still looming large due to a spike in cases across greater Houston and other parts of Texas.

Whether home sales would continue to climb up or plunge again in the third quarter of 2020 is not certain. New listings were down for a fifth consecutive week during the week ending July 6 compared to 2019.

Pending sales, which have been strong over the last several weeks, also reflected mounting concerns related to a spike in coronavirus cases with a 3.6 percent decline for the week ending July 6 compared to the same week in 2019.

With a slew of pending transactions converting to closed sales in August, the Houston housing market achieved its third consecutive month of positive home sales. On a year-to-date basis, the market is running 2.8 percent ahead of 2019’s record pace.

Single-family home sales, total property sales, and total dollar volume all rose compared to August 2019. Pending sales soared 35.9 percent. However, total active listings – or the total number of available properties – fell 23.0 percent.

It is quite evident that the ongoing pandemic has had a major impact on home sales in the Houston real estate market. Houston home sales dropped sharply in April & May from both the previous month and year as the housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order.

However, as can be seen in the above reports released by HAR, the pent-up demand resulting from COVID-19 has boosted home sales since June 2020. Virtual technology developed by the Houston Association of Realtors (HAR) made it possible for consumers to attend open houses and property showings remotely, without putting their health at risk. By the time 2020 was over, April and May emerged as the only negative sales months, as the market rebounded over the summer and gained momentum each month for the rest of the year.

New real estate records were set throughout the year, with July going down as Houston’s greatest one-month sales volume of all time – 10,815 single-family units sold. A record-high average price of $347,164 and a record-high median price of $273,443 were achieved in December. On a year-to-date basis, the average price rose 5.9 percent to $324,069 while the median price increased 6.1 percent to $260,000. Total dollar volume for full-year 2020 jumped 18.1 percent to a record-setting $35.3 billion.

***The lastest market trends have already been discussed above***

Houston Real Estate Market After Hurricane Harvey

Hurricane Harvey had some fascinating and somewhat surprising effects on the Houston Real Estate Market. Harvey’s devastating economic impacts have a silver lining for homebuyers in Houston. Houston's real estate market forecasts look promising after the hit the city took from Hurricane Harvey in 2017.

Big weather events hit many areas of the USA hard last year, and the costs of repairing the damage have been astronomical. But Houston has shown its trademark resilience, and 2018 is predicted to see real estate growth of 2.8% in the city, meaning now would be a good time to invest.

Hurricane Harvey tremendously impacted the real estate market in Houston, Texas. Houston had some of the largest swings in real estate value. So what were the economic ramifications of Hurricane Harvey on this delicate market? First, people have renewed interest in houses that were located in areas that did not flood.

This isn’t a particularly surprising statistic. Buyers now have confirmation that these areas can survive a catastrophic event and that they won’t be in any danger of damage. A recent trend, though, has been that homes in areas that were damaged by Hurricane Harvey have started to see a pick-up in sales.

Many houses that were damaged are being quickly sold to real estate investors. They saw an opportunity after Hurricane Harvey to buy damaged homes on the cheap in the Houston Real Estate Market. This has, in turn, led to Houston becoming a valuable “hot spot” for the real estate market in the US.

In October alone, 6,381 homes were sold in the Houston Real Estate Market, an increase of 7.5% over the same period last year. Agents are not only selling houses at a faster rate, but they are also commanding a higher price for their sales. Realtors are selling houses in Houston, Texas for over $7,000 or more than in the previous years.

Perhaps the largest increase, though, has been in rental marketing. People whose houses Hurricane Harvey damaged have been looking to rent since the hurricane struck in late October. The rental market in Houston is approaching an all-time high. Investors are also intrigued by this statistic as it allows them to make money off of houses they may not be residing in at a given time.

This has further contributed to an increase in the housing market in Houston, Texas. The rental statistics for single-family homes and townhomes/condominiums are staggering. Single-family homes saw an increase of 83.6 percent over 365 days while townhomes and condominiums saw an increase of a mind-boggling 92.2 percent.

It is not surprising, then, that investors have flocked to the area with the idea of making a quick buck. As many have learned, the profit that could be acquired in this area is immense. The housing market in Houston is in an exciting new territory.

Although Harvey’s effects were devastating, the hurricane also contributed to the Houston housing market’s new rise after Harvey. Houston's inspiring efforts to come together and recover show the resilience of the people there and the city’s strength. The government’s quick response to the tragedy and their overwhelming desire to help the people exhibits the city’s importance on a national, and continental, scale.

Houston housing market remained in recovery mode in 2018 following devastating floods from Hurricane Harvey. People living in more expensive cities such as New York, Los Angeles, and San Francisco flocked to cheaper living cities such as Houston, Texas.

Many workers were fed up with the costs in these regions and were having difficulty surviving in areas with labor shortages, rising mortgage rates, and higher lumber costs. All these factors contributed to a significant upward trend in the Houston housing market in 2018.

Houston Real Estate Investment Outlook

Investing in Houston real estate can be a worthy investment due to a steady rate of appreciation. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Should you consider Houston real estate investment? Houston is a minimally walkable city in Harris County with a population of approximately 2,112,810 people. It is a diverse city with lots to offer that will cater to the tastes of a variety of potential buyers and tenants.

According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Houston. Other types of housing that are prevalent in Houston include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 45% of Houston's housing units.

Nearly 79,000 single-family detached homes were sold in the first 11 months of 2019, with year-to-date sales running 4.1 percent ahead of last year’s record volume. The total number of homes sold in the entire twelve months of 2018 was 82,229. Residential units, hotels, office buildings, restaurants; the city is seeing continuous development projects that promise to keep the real estate market strong. Many of Houston’s neighborhoods are some of the most attractive places to live in the whole of Texas, and it’s not hard to see why.

With a great balance of urban regions and open spaces in the suburbs, the potential for development is clear to see, and the natural features of the land are some of the most attractive features you could hope for in an investment district. The Texas real estate market has been pretty quiet for a little under a decade now, but the real estate market in Houston has managed to remain relatively consistent while its surrounding areas have dragged their feet.

Houston has always been a hotbed of buyer activity; just ask the multitude of overseas investors who choose Houston as the city of their choice to invest in real estate. There was a time when Houston seemed immune to the highs and lows of housing cycles, but it now seems to have joined the pace of the national average.

But its rate of appreciation continues to be slightly above the national rate. With an extremely diversified economy and a huge demand for housing, Houston remains one of the top markets in the nation for real estate investing. Houston is one of the country’s top job creators, the home of America’s booming energy industry, is more diverse than New York City, and lets you stretch a paycheck farther than anywhere else in the country. Houston is also one of the hottest real estate markets in the nation.

Top Reasons To Invest In The Houston Real Estate Market

Houston is the #1 Market in the US for Job Creation.
Housing real estate is affordable.
4th largest city in the US.
Its unemployment rate is far below the national level.
A paycheck goes farther in Houston than any other major metropolitan area.
Houston didn’t experience a housing bubble the way the rest of the country did.
It’s home to more Fortune 500 headquarters than anywhere in America except for New York.
It’s one of the centers of America’s booming oil and gas industry.
Massive international trade gives another big job boost to the rapidly growing city.
Houston is called Space City for a reason; it’s home to the NASA Astronaut Corps.
The New York Times calls it ‘one of the country’s most exciting places to eat.’
A spectacular range of ethnic cuisines, fantastic seafood, and great barbecue.
Ignore the Astros. The Texans, Rockets, and Dynamo are all winners.
It hosts the world’s largest concentration of health care organizations, with scientists working hard to beat cancer.
The city is filled with world-class and unique museums and cultural landmarks, like the Rothko Chapel.
The combination of The University of Houston and Rice University means there are a bunch of smart people around.
Houston recently passed New York to become the most ethnically and racially diverse city in the US.
And finally, it’s a great place for Southern hip hop!
There are 1,196 schools in Houston, TX. There are 490 elementary schools, 256 middle schools, 178 high schools, and 272 private & charter schools.
To know more about Houston, read his blog – 17 Facts That Make Houston the Best City in America.

Good cash flow from Houston investment properties 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 Houston real estate investment opportunity would be key to your success.

If you invest wisely in Houston real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Houston and want to purchase property to rent out.

The running costs for owning and managing a Houston rental property should not be high. While hiring a property management company you should expect to give up roughly ten percent of the rent for each property they manage. Remember to factor this loss into your calculations when budgeting for a new rental property.

The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Houston investment property and you should be able to get a good return on your investment over the long term.

The neighborhoods in Houston must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Houston might not be the best place to live in.

A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. Houston's real estate prices are well above average cost compared to national prices.

It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. The inventory is low, but opportunities are there.

When looking for real estate investment opportunities in Houston or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum of 1% profit on your investment.

An example would be: at $120,000 mortgage or investment cost, $1200 per month rental. That would be the ideal equation for example. Even with rent increases, buying a $500,000 investment property in Houston is not going to get you $5000 per month on rent.

The asking price of single-family homes in Houston (on Realtor.com) can start from $29,000 and can go up to $29.5M for a luxury property located in the Westside neighborhood. You can find many new construction houses available for sale in Houston.

Neartown – Montrose has a median listing price of $639,000, making it the most expensive neighborhood in Houston. Alief is the most affordable neighborhood, with a median listing price of around $155,000.

Even as Houston's home prices have reached new heights, the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain.

The homebuyers won’t be able to outbid real estate investors and would end up renting. As with any real estate purchase, act wisely. Evaluate the specifics of the Houston housing market at the time you intend to purchase.

Here are the top 10 Highest Appreciating Houston Neighborhoods Since 2000 (List by Neighborhoodscout.com)

W 34th St / Mangum Rd
W Patton St / Enid St
N Main St / Norhill Blvd
Fulton St / Collingsworth St
W 43rd St / T C Jester Blvd
W 43rd St / Mangum Rd
Oak Forest Dr / Candlelight Ln
Judiway St / Piney Woods Dr
N Shepherd Dr / W 43rd St
N Post Oak Rd / Westview Dr

Other Texas Real Estate Investment Markets

Apart from Houston, you can also invest in the housing market of Dallas, TX. If you have decided to invest in Dallas, you can either buy a fixer-upper or you may want to buy a Dallas investment property. This market offers a wide range of turnkey investment properties; you just have to find your tenants to rent out the property.

The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates, and high population of young households were pivotal in the ranking process. The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.

The Central, Cielo Vista, and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.

The next one is the San Antonio real estate market. The median home value in San Antonio is $167,600. San Antonio home values have gone up 8.0% over the past year and Zillow predicts they will rise 2.5% within the next year. For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of its outsized military presence.

Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis, and Camp Stanley are located in the immediate vicinity. This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment. San Antonio has a dearth of affordable housing because demand is so much greater than the supply.

This has created a large number of renters who need to pay quite a bit to rent apartments or single-family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two-month inventory.

The Austin housing market is one hot place to invest in Texas. It isn’t the largest in the state of Texas, but there are several reasons to consider buying real estate in this city. The Austin real estate market has gained a lot of steam, with home values almost doubling since 2010. The Austin real estate market isn’t as big as Dallas, San Antonio, or Houston.

One of the long-term strengths of Austin is its diverse economy. The Austin real estate market dipped after the layoffs of the Dot-Com boom. They decided to solve the problem by encouraging medical and biotech employers to relocate to the area, too. As of this writing, there are 85 biotech and pharmaceutical companies in Austin.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Houston.

Consult with one of the investment counselors who can help build you a custom portfolio of Houston turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Houston.

Not just limited to Houston or Texas but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Houston turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Let us know which real estate markets you consider best for real estate investing!

Please do not make any real estate or financial decisions based solely on the information found within this article. Some of 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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Houston real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.

REFERENCES:

Market Data, Trends, and Forecasts
https://www.har.com/content/mls
https://www.zillow.com/houston-tx/home-values
https://www.neighborhoodscout.com/tx/houston/real-estate
https://www.littlebighomes.com/real-estate-houston.html
https://www.realtor.com/realestateandhomes-search/Houston_TX/overview

Rental Statistics
https://www.rentcafe.com/average-rent-market-trends/us/tx/houston/
https://www.rentjungle.com/average-rent-in-houston-rent-trends/

Foreclosures
https://www.realtytrac.com/statsandtrends/foreclosuretrends/tx/harris-county/houston

Downtown Houston
https://www.downtownhouston.org/development

Houston After Hurricane Harvey
https://www.houstonproperties.com/hurricane-harvey-impact-houston-realestate
https://www.bizjournals.com/houston/news/2017/10/11/following-harvey-houston-sees-home-sales-rebound.html
http://www.chron.com/business/real-estate/article/Houston-real-estate-market-continues-post-Harvey-12341532.php
https://www.npr.org/2017/11/08/562903267/some-real-estate-investors-eager-to-buy-houston-homes-damaged-by-flooding

Spokane Housing Market: Prices | Trends | Forecast 2021-2022

September 22, 2021 by Marco Santarelli

Spokane has been one of the hottest real estate markets in the country for many years. Home prices in the Spokane real estate market are expected to rise at a steady pace in 2021 & 2022. There is a high housing demand in the Spokane housing market and the current supply equals 19 days. Months Supply of Inventory is a calculation that quantifies the relationship between supply and demand in a housing market. In Spokane, it would take 19 days for the current inventory of homes on the market to sell given the current sales pace. It shows that Spokane housing marketing is favoring sellers.

A new study confirms what Spokane homebuyers have long suspected: Lilac City's real estate market is one of the most overvalued in the country. Florida Atlantic University and Florida International University researchers recently released a list of the nation's top 100 most overpriced housing markets. Spokane came in sixth place, with home prices more than 45 percent above the expected value based on historical pricing data.

With low interest rates, homebuyers get more houses for their money and benefit from a fixed mortgage payment, unlike rent, which has been rapidly increasing in Spokane in recent months. The median home price in Spokane County increased to $389,728 in August 2021, up from $317,000 in August 2020, according to data from the Spokane Association of Realtors. However, a slight increase in inventory and price reductions, combined with cooling of sales, may be signs of a market rebalancing. Home sales were down 1.7% from a year ago.

Spokane Housing Market Trends 2021 (Describes August)

Spokane is currently a hot seller’s real estate market – which means that the demand from buyers is exceeding the current supply of homes for sale. Historically low-interest rates, tight inventory, and strong demand are continuing to favor sellers in the Spokane housing market. The pricing of homes is trending higher and is more attractive for sellers in the current phase. The shortage of supply and an increase in the demand for housing will push the prices higher.

According to Realtor.com, the Spokane housing market is a seller's market, which means there are roughly more buyers than there are active homes for sale. The median list price of homes in Spokane, WA was $389,900, trending up 19.9% year-over-year. The median listing price per square foot was $196. The median sale price was $390,500. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Spokane have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 101.9% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.

Below is the summary of the monthly housing report for August 2021, released by the Spokane Association of Realtors for single-family residential/site-built properties on less than one acre and condominiums. Inventory remains very tight leading to a surge in home prices. Demand is outpacing the supply.

Spokane home sales were down 1.7% from a year ago.
Closed sales of single-family homes on less than one acre including condos for August 2021 total 734 compared to August 2020 when the total was 747
The average closed price for August 2021 was $424,454 (+26.5%) compared to August 2020 when the average price was $335,532.
The median closed price for August 2021 was $389,728 (+22.9%) compared to August 2020 when the median price was $317,000.
Inventory as of this report totals 479 properties which represents a 19 day supply.
Compared to last year at this time inventory was at 534 properties.
The current inventory is down 10.3% compared to last year.
The number of new listings for August total 916, compared to August 2020 when there were 896 new listings

Year To Date Home Sales Report Through August 2021

Closed sales of single-family homes on less than one acre including condos through August 2021 total 5,235 compared to 5,031 through August 2020.
This is an increase of 4.1%.
The average closed price through August 2021 is $396,388 (+27.4%) compared to $311,228 through August 2020.
The median closed price through August 2021 is $365,000 (+25.9%) compared to $290,000 through August 2020.
Inventory as of this report totals 479 properties which represents a 19 day supply.
Compared to last year when inventory was at 534 properties.
Inventory is down 10.3%.
The number of new listings through August totaled 6,303 (-5.4%) compared to the same period last year when there were 6,660 new listings.

According to the Spokane Association of Realtors, the Net Closed Volume for August 2021 was $432,851,899. There were 1,652 listings processed, 1,059 closed sales. Compared to last month, Net Closed Volume is down $98,425,864. Listings are down 95, sales are down 228. Compared to last year, Net Closed Volume is up $31,836,832. Listings are up 551, sales are down 185. Mandatory sales volume was $411,535,298. Non-Mandatory sales volume was $21,316,601. Pending sales (figured on list price) were $525,909,790. There were 1,324 pending sales processed.

Spokane Real Estate Market Forecast 2021-2022

What are the Spokane real estate market predictions for 2021-2022? Spokane's housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the nation. Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since Sep 2011, the typical home value in Spokane County has appreciated by around 131.4%. The Spokane house prices remained almost flat from 2012 to 2015. Spokane County home values have gone up 30.9% over the past year alone. The typical value of homes in Spokane is currently $395,704.

It indicates that 50 percent of all housing stock in the area is worth more than $395,704 and 50 percent is worth less (adjusting for seasonal fluctuations). ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The supply is exceeding the demand, giving purchasers an advantage over sellers in price negotiations. In other words, there are more homes for sale than there are buyers in the marketplace. Spokane is a seller's real estate market.

The typical home value of homes in Spokane-Spokane Valley Metro is $383,649.
Spokane Valley home values have gone up 31.4% over the past year and Zillow predicts they will continue to rise in the next twelve months.
Spokane County home values have gone up 30.9% (current = $395,704) over the past year and will continue to rise over the next twelve months.
Spokane home values have gone up 31.1% (current = $361,387) over the past year and will continue to rise over the next twelve months.

Here is the Spokane, WA real estate price appreciation graph by Zillow. It shows a positive home price appreciation forecast until Jun 2022.

Spokane Real Estate Market Forecast — Courtesy of Zillow

Spokane Real Estate Investment: Should You Invest in Spokane?

Now that you know where Spokane 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. Should you consider Spokane real estate investment? Many real estate investors have asked themselves if buying an investment property in Spokane is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021.

Let's talk a bit about Spokane before we discuss what lies ahead for investors and homebuyers. Spokane is the second-largest city in Washington State. It is sited on the Spokane River in the foothills of the Rocky Mountains. The population of Spokane is around two hundred thousand. However, the Spokane real estate market includes the broader metropolitan area that is home to nearly 600,000 people.

Spokane housing market has a mixture of owner-occupied and renter-occupied units. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Spokane. Other types of housing that are prevalent in Spokane include duplexes, rowhouses, and homes converted to apartments. Spokane single-family homes account for 65.75% of the city's housing units.

This real estate market of Spokane is sizzling hot though it is often overlooked for hotter markets like Seattle and San Francisco. Spokane homes are selling faster than Seattle homes. Inventor is very tight (would last only for 12 days at the current pace of sales). Why should one invest in this hot market in Washington? Well, to begin with, Spokane has a record of being one of the best long-term real estate investments in the U.S. over the past 10 years.

Like most cities in Washington State and nationwide, Spokane has experienced home price increases over the last couple of years. Looking at just the latest twelve months, Spokane appreciation rates continue to be some of the highest in the nation, at 11.72%, which is higher than appreciation rates in 96.19% of the cities and towns in the nation, according to Neighborhoodscout's data. Based on the last twelve months, short-term real estate investors have found good fortune in Spokane. Spokane appreciation rates in the latest quarter were at 2.44%, which equates to an annual appreciation rate of 10.10%.

Although this article alone is not a comprehensive source to make a final investment decision for Spokane, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Spokane. Let’s look at the state of the Spokane real estate market and the factors driving the market in the short and long term.

Spokane's Geography Limits Housing Supply

Geography up and down the West Coast limits the potential housing supply. We can’t build on water. The desire to preserve views and community limits how high vertically builders are allowed to build when they redevelop properties, while the mountains don’t provide a lot of places where you can build more than a basic bungalow. This explains why the Spokane real estate market along with Portland, San Francisco, and other Pacific coast cities are seeing rapid appreciation. In Spokane’s case, the riverfront is simply desirable but the mountains limit how far the city can expand. So, too, do the many national parks and wilderness areas near the city.

California’s Loss is Spokane’s Gain

In 2017, more than 130,000 people fled California to the surrounding states. Nor is this trend going to slow down, given that half of the adults say they are considering leaving the state. Housing costs and availability were two of the most commonly cited reasons, though security, crime, taxes, and jobs were also factors. And while Californians moving to Texas makes the headlines, in reality, most stay closer to home. In 2016 alone, more than 50,000 Californians moved to Washington. Furthermore, urban dwellers tend to move from city to city, moving from downtown San Francisco to the Spokane real estate market, where they can afford to buy homes.

Spokane isn’t like Oregon

We can talk about the number of people fleeing the oppressive regulations and high tax rates of California driving up real estate prices across the West Coast and the Rocky Mountains. However, not all states are equally attractive. We’re recommending investing in Spokane rental properties instead of hot markets like Portland, Oregon because of Oregon’s recent legislation. For example, they became the first state to implement statewide rent control. State law to limit how fast rents can rise is intended to help renters, but it creates cash flow for landlords that inevitably leave them unable to maintain properties.

Long term, these rules hurt renters, too, because an inability to recoup the cost of construction and maintenance prevents new housing stock from being built. Given how well economists understand that rent control hurts housing quality and affordability by limiting new construction except for luxury units that are exempt from rent control rules, we’re sure future laws that undermine the profitability of real estate in Oregon will go into effect soon. Invest in the safer, saner Spokane real estate market instead.

Spokane Housing Costs Remains Cheap Compared to Other West Coast Cities

Silicon Valley made the news when the cost of the average home there passed the million-dollar mark. The median home price in California passed half a million in 2017, and while home sales in California have slowed, demand has not. Yet Spokane remains relatively affordable. You could buy two Spokane rental properties for the price of one property in California, and if you hunt for a bargain or choose smaller starter homes, you could buy several rental properties in the Spokane housing market for the price of one property in a hot California market. The fact that living in Spokane is cheaper than the U.S. average is only another reason for people to move here.

Spokane Beats Seattle, Too

Seattle is larger than Spokane, but the Spokane real estate market is hotter because the area is cheaper than Seattle. Millennials, in particular, are flocking to the Spokane housing market because rents are half that of Seattle, while home prices are a third that of Seattle. Note that if a one-bedroom apartment in the Seattle market costs around $1000, you could charge $2000 or more for Spokane rental properties with enough space for a growing family. Seattle may be making its own tax mistakes from the soda tax to its fight to pass a city income tax. This makes buying in more sedate Spokane a wise choice.

Spokane Has Low Tax Rates for a West Coast City

California is one of the highest taxed states, taking 11% of one’s income. That’s somewhat more than the 9.3% peak rate Washington State takes. That’s also lower than Oregon’s 10.3% income tax rate. Another point in favor of Washington State is its lower average property tax rate. The average property tax rate for Washington properties is around 1.1% of the assessed value, close to the national average of 1.2%. The benefit of the Spokane real estate market is the significantly lower property values compared to Seattle that results in a far lower property tax bill.

Spokane's Strong Rental Market

Washington State doesn’t put a limit on security deposits, though it has strict deadlines by which landlords must refund the money. Landlords can raise the rent if they provide at least thirty days' rent. Tenants have three days to pay the rent before an eviction can proceed. Washington State allows tenants to be evicted for any cause, though the Tenants Union wants to prohibit evictions unless there is an acceptable reason to be evicted such as the property is being sold.

Washington state law says that tenants can withhold rent if important repairs are not completed, and they can repair serious issues and deduct it from their rent. This is an area where Spokane beats Seattle, too. Seattle requires 90 days’ notice to evict someone without cause, while Spokane has no such regulations.

The student market consisting of 18 separate universities does pump a lot of renters into the Spokane housing market, but it isn’t a huge market segment in and of itself. However, the impact of the Washington State University campus in Spokane is massive. The Spokane housing market is certainly impacted by the relocation of the College of Pharmacy to the local campus, the new Health Sciences Campus, and tens of millions of dollars of new educational facilities.

The biomedical research facilities should add to the number of high-paying research and educational jobs in the area. A side benefit of the large campus and the associated jobs is that it makes the Spokane area’s population much younger than average, guaranteeing demographic momentum as people remain here for work and choose to buy homes for their growing families.

The City Is Poised to Take Off

One reason why Spokane long lagged behind Seattle was its higher unemployment rate. Seattle has a roughly 3% unemployment rate, significantly lower than the 5% unemployment rate seen in Spokane. Spokane’s economy, though, is seeing a surge of higher-wage jobs. Out of the tens of thousands of new jobs created since 2010, the majority of them pay more than the average county wage – which is in line with the national average. The promise of better pay will lure many people to Spokane to live, fueling demand for the Spokane housing market.

Conclusion

Spokane is a relatively cheap real estate market on the West Coast. It is already seeing increased demand and property valuations, while it remains a safe place to invest in real estate. Skip Seattle and Silicon Valley and invest in the future growth of Spokane. Good cash flow from Spokane investment properties means the investment is, needless to say, profitable. On the other hand, a bad cash flow means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Spokane in a growing neighborhood would be key to your success.

Consult with one of the investment counselors who can help build you a custom portfolio of Spokane turnkey investment properties in some of the best neighborhoods. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Spokane turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Apart from the Spokane real estate market, you can also invest in another hot market like Seattle. Seattle’s tech landscape and real estate market are rapidly evolving. Google just 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 50% price growth in this market which has priced out many middle-class buyers.

Another city in Washington where you can invest is called Tacoma. Tacoma sits at the southern end of Puget Sound and straddles Commencement Bay. Being a large port town, it is already flanked by smaller cities and backed by mountains. This prevents the city from simply expanding outward, forcing developers to pay for the more expensive redevelopment of existing properties. This will keep prices in the Tacoma real estate market high as long as the job market remains strong. It certainly limits the ability to quickly bring new supply to a tight housing market that has only 1.5 months of inventory on hand.

The third real estate market which is good for investment is Walla Walla. The Walla Walla real estate market is much more stable than coastal real estate. Property prices have appreciated about six percent in the past ten years. This is slow, steady growth. It is far better than the depreciation you see in some rural areas. It doesn’t provide the excitement of Seattle and San Francisco property prices rising by double digits, but you also don’t see housing prices crash because a tech giant decides they want to leave the area, citing insane real estate prices.

Let us know which real estate markets you consider best for real estate investing in 2020!

References:

Spokane demographics
https://en.wikipedia.org/wiki/Spokane,_Washington
Latest Market Data, Trends, and Statistics
https://www.spokanerealtor.com/market-snapshot
https://www.spokanerealtor.com/mls-weekly-news-information
https://www.zillow.com/Spokane-wa/home-values
https://www.littlebighomes.com/real-estate-spokane.html
https://www.neighborhoodscout.com/wa/spokane/real-estate
https://www.movoto.com/spokane-wa/market-trends
https://www.realtor.com/realestateandhomes-search/Spokane_WA/overview
https://www.sammamishmortgage.com/spokane-the-other-hot-market
Foreclosures
https://www.realtytrac.com/statsandtrends/wa/spokane-county/spokane/
WSU impact
https://advantagespokane.com/workforce
Taxes
http://mynorthwest.com/905380/washington-taxes-ranking
Oregon / rent control
https://www.heraldtribune.com/news/20190304/oregon-becomes-first-state-to-impose-statewide-rent-control
https://www.brookings.edu/research/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control
California’s loss
http://www.ktvu.com/news/ktvu-local-news/california-exodus-study-says-more-people-leaving-state-than-moving-here
https://www.cnbc.com/2019/02/12/growing-number-of-californians-considering-moving-from-state-survey.html
https://www.tsishipping.com/blog/moving/top-10-places-californians-now-call-home-2018
Restricted density/building height
http://www.spokesman.com/stories/2017/mar/12/spokane-leaders-look-to-lift-restrictions-on-build
Spokane is relatively cheap
https://www.prnewswire.com/news-releases/california-home-sales-close-year-on-downward-trend-as-home-prices-post-mild-gains-car-reports-300780469.html
It beats Seattle
http://mynorthwest.com/905380/washington-taxes-ranking
https://www.krem.com/article/news/local/spokane-county/why-live-in-spokane-over-seattle-its-way-cheaper/293-561489776
Relatively landlord-friendly
https://www.nolo.com/legal-encyclopedia/overview-landlord-tenant-laws-washington.html
https://www.krem.com/article/news/local/spokane-county/tenants-union-landlord-association-look-at-regulations-on-rent-increase/293-605044268
High wage jobs
http://www.spokesman.com/stories/2017/feb/13/spokane-area-economy-is-creating-higher-wage-jobs
High appreciation
https://www.krem.com/article/news/local/spokane-county/spokane-co-home-values-increase-dramatically-for-2019/293-587065966
https://www.krem.com/article/news/investigations/2-on-your-side/spokanes-housing-market-hotter-than-seattles-for-first-time-in-six-years/293-eaa7b3d2-3281-410d-95b8-26c07f8e54c4

Detroit Michigan Housing Market: Trends & Forecast 2021-2022

September 21, 2021 by Marco Santarelli

Investing in the Detroit housing market has been a source of contention for investors for a long time. The effects of the pandemic are visibly diminishing in 2021, and other indicators show that the city is beginning to recover its footing. When considering whether or not to add properties in the Motor City to your portfolio, keep these three current trends in mind. The city of Detroit is one of the most populous in the Midwest. It also serves as the county seat for Wayne County.

When it comes to residential in Detroit, home prices are exceptionally low. The median price was $75,000 in August 2021, a growth of over 35% from last year. The rentals can generate extremely high returns on investment. Since the purchase price of a Detroit single-family home is significantly less than $100,000, it presents a fantastic opportunity with significant returns and cash flow.

Although the city's population is shrinking the number of millennials who are relocating to Detroit is steadily increasing. According to a recent study conducted by the Detroit Chamber of Commerce, metro Detroit experienced the second-highest growth among peer cities for people between the ages of 24 and 35 over the previous decade, ranking second among peer cities overall.

Even though prices in the Greater Metropolitan Area of Detroit have increased by more than 12 percent year over year, the median home price of $230,000 is significantly lower than the national average of $359,900, providing investors with significant room to maneuver in terms of their profit margin. Is Detroit going to be one of the hottest real estate markets for investors in 2021 & 2022? Let’s take a look at the latest Detroit housing market trends to come to a conclusion.

Michigan Housing Market Trends 2021 (Most Recent Stats)

Michigan real estate is becoming more expensive as more buyers compete for the same properties. The statewide data on residential homes from the 42 regional listing boards that comprise the Michigan Association of Realtors show that the average sales price increased 11.79 percent from a year earlier in July 2021. The median home price in Michigan went up from $219,549 to $245,439. The total residential sales in the state recorded a decline of -18.12% year-over-year, from 15,696 to 12,852 sales.

Low interest rates are still attracting buyers even though there are fewer homes available for sale. The rising prices are a reflection of a healthy Michigan housing market. A new high-water mark is being set in the number of sales in many Michigan communities. Compared to the previous year, homes in the Greater Metropolitan Area of Detroit area stayed on the market for an average of 18 days in August 2021. Several regions saw home price gains of 15 percent or more, including the City of Detroit, where the median home price shot up from $140,738 to $230,447, according to Realcomp August 2021 Statistics.

Other large price gains in the Detroit Area housing market were made in:

City of Detroit, +36.4%
Huron County, +30.3%
Sanilac County, +30.3%
Dearborn/Dearborn Heights, +16.4%
Downriver Area, +16.2%
Genesee County, +15.2%
Lapeer County, +19.8%
Livingston County, +16.3%
Tuscola County, +18.3%

The FMHPI is an indicator for typical house price inflation in the United States. It indicates that home prices increased by 12.2 percent in Michigan in 2020 as a result of strong housing demand and record low mortgage rates. Growth has accelerated to 18.66% from June 2020 to June 2021. The current Freddie Mac House Price Index for Michigan is 161.34 (June 2021).

10-year % Change in House Price Index: 118.6%

Annual % Change in House Price Index: 18.7%

Quarterly % Change in House Price Index: 5.4%

Monthly % Change in House Price Index: 1.8%

According to Redfin, a real estate company, home prices in Michigan statewide were up 9.5% year-over-year in August 2021. At the same time, the number of homes sold fell 7.1% and the number of homes for sale fell 21.3%. The latest trends show that the Michigan housing market is becoming increasingly competitive, with bidding wars becoming more common. A large or increasing percentage of homes are selling for more than the asking price. In August 2021, 50.9 percent of the homes sold for more than the asking price, representing a 15.4 percent increase year-over-year. This percentage was 25.2 percent two years ago (in August 2019).

Top 5 Most Competitive Housing Markets in Michigan in 2021

1. Kentwood, MI: In August 2021, Kentwood home prices were up 19.5% compared to last year, selling for a median price of $262K. On average, homes in Kentwood sell after 7 days on the market compared to 6 days last year. There were 70 homes sold in August this year, down from 75 last year.

2. Northview, MI: In August 2021, Northview home prices were up 74.4% compared to last year, selling for a median price of $358K. On average, homes in Northview sell after 7 days on the market compared to 5 days last year. There were 22 homes sold in August this year, down from 28 last year.

3. Sparta, MI: In August 2021, Sparta home prices were down 10.6% compared to last year, selling for a median price of $198K. On average, homes in Sparta sell after 6 days on the market compared to 12 days last year. There were 18 homes sold in August this year, down from 29 last year.

4. Wyoming, MI: In August 2021, Wyoming home prices were up 13.9% compared to last year, selling for a median price of $205K. On average, homes in Wyoming sell after 6 days on the market compared to 5 days last year. There were 103 homes sold in August this year, down from 118 last year.

5. Allen Park, MI: The Allen Park housing market is most competitive (92/100). Homes in Allen Park receive 4 offers on average and sell in around 6 days. The average sale price of a home in Allen Park was $187K last month, up 22.7% since last year. The average sale price per square foot in Allen Park is $155, up 15.7% since last year.

Redfin's Compete Score measures an area's competitiveness on a scale of 0 to 100, with 100 indicating the most competitive area. The Compete Score is determined primarily by four inputs: the number of competing offers, waived contingencies, sale to list ratio and days on market.

Let us also look at the price trends recorded by Zillow over the past few years. Since Sep 2011, the typical home value in Michigan (statewide) has appreciated by nearly 119% (Zillow Home Value Index). ZHVI reflects the typical value for homes in the 35th to 65th percentile range. Currently, the typical value of homes in Michigan is $214,231. Over the past year alone, the 214,231 home values have gone up by 17.4% due to robust housing demand and low mortgage rates.

Greater Detroit Real Estate Market Trends 2021 (Describes August YOY)

Here are the August 2021 residential stats for the Greater Metropolitan Area of Detroit, including but not limited to locales in Lapeer, Macomb, Oakland, Washtenaw, and Wayne Counties, released by the Greater Metropolitan Association of REALTORS® (provided by Realcomp).

Residential Homes Sold = 4,615
Average Sales Price = $279,291
Months Supply of Inventory = 1.7
Inventory Decrease Compared to August 2020 = 19%

August Year-Over-Year Residential & Condo (Combined) Comparisons:

Median Sale Price was up by 11.9% from $210,000 to $235,000.
The average days on market (DOM) decreased by 56.9% from 51 to 22 days.
The average % of the last list price received increased by 2.2% from 99.1% to 101.3%.
New Listings increased by 3.3% from 16,125 to 16,653.
Average Showings per Home decreased from 10.8 to 10.1.
Pending Sales were down by 10.5% from 14,444 to 12,921.
Closed Sales were down by 12.3% from 13,945 to 12,235.
Listings that were both listed and pended in the same month were at 6,877. This represents 41.30% of the
New listings for the month and 53.22% of the pended listings.
Months-Supply of Inventory was down by 26.1% from 2.3 to 1.7.

Detroit (Wayne County) Housing Market Trends 2021

Wayne County is the most populous county in the U.S. state of Michigan. As of 2020, the United States Census placed its population at 1,793,561 making it the 19th-most populous county in the United States. The county seat is Detroit. Single-family detached homes are the single most common housing type in Detroit, accounting for 66.04% of the city's housing units. Three and four-bedroom single-family detached homes are the most common housing units found in Detroit. Detroit city has a mixture of owners and renters, with 47.23% owning and 52.77% renting.

As per Realtor.com, in August 2021, the median list price of homes in Wayne County, MI was $169K, trending up 12.7% year-over-year. The median listing price per square foot was $133. The median sale price was $204K. Homes in Wayne County, MI sold for approximately the asking price on average in August 2021. Northville Township has a median listing price of $484K, making it the most expensive city. Detroit is the most affordable city, with a median listing price of $79.9K.

These are the latest stats published by the Greater Metropolitan Association of REALTORS® for August 2021.

Median Sale Price was up by 11.7% from $163,000 to $182,000.
The average days on market (DOM) decreased by 45.5% from 33 to 18 days.
The average % of the last list price received increased by 2.7% from 98.3% to 101.0%
New Listings increased by 11% from 2,486 to 2,759
Pending Sales were down by 2.6% from 2,012 to 1,959.
Closed Sales were down by 11.2% from 2,006 to 1,782.
Months-Supply of Inventory was down by 17.4% from 2.3 to 1.9.

Detroit Metro Housing Market Forecast 2021-2022

What are the Detroit metro real estate market predictions for 2021 & 2022? In the last decade, Detroit has seen some of the highest home appreciation rates in the country. Let us also look at the price trends recorded by Zillow over the past few years. Since Sep 2011, the median home prices in Detroit-Warren-Dearborn Metro have appreciated by nearly 143% (Zillow Home Value Index). ZHVI reflects the typical value for homes in the 35th to 65th percentile range. Currently, the typical value of homes in Detroit-Warren-Dearborn Metro is $223,461. Over the past year alone, home values in this region have gone up by 18.4% due to robust housing demand and low mortgage rates.

Detroit-Warren-Dearborn Metro home values have gone up 18.4% over the past year and the latest forecast is that they will rise 11.2% in the next twelve months.
Detroit City home values have gone up 37% over the past year (current = $58,213) and will continue to rise at a similar pace in the next twelve months.
Wayne County home values have gone up 21% over the past year (current = $145,614) and will continue to rise in the next twelve months.
Oakland County home values have gone up 16.9% over the past year (current = $316,348) and will continue to rise in the next twelve months.

Here is the graphical representation of historical Detroit metro house prices and the latest forecast until August 2022.

Detroit Real Estate Market Forecast — Credits: Zillow

According to Neigborhoodscout, over the last decade, Detroit real estate has appreciated 75.30 percent, which equates to an average annual appreciation rate of 5.77 percent, placing Detroit in the top 20% of all cities for real estate appreciation. In the last twelve months, Detroit's appreciation rates have remained among the highest in the country, at 12.35 percent, which is higher than the appreciation rates in 85.92 percent of the nation's cities and towns. Short-term real estate investors have found success in Detroit over the last twelve months. Detroit appreciation rates were 2.98 percent in the most recent quarter, equating to a 12.47 percent annual appreciation rate.

Here are the best neighborhoods to invest in Detroit rentals because they have the highest appreciation rates since 2000 (List by Neigborhoodscout.com).

3rd St / W Forest Ave
Gratiot Ave / Antietam Ave
Woodward Ave / W Forest Ave
Michigan Ave / Trumbull St
W Jefferson Ave / Woodward Ave
Trumbull St / Ash St
Ecumenical Theological Seminary / Beaubien St
Saint Aubin St / Holbrook St
E Ferry St / Russell St
Russell St / Wilkins St

Detroit Real Estate Investment Overview

Investing in real estate is touted as a great way to become wealthy. Should you invest in Detroit rental real estate? Many real estate investors have asked themselves if buying rental property in Detroit is a 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 Detroit housing market forecast for answers on why to put resources into this market.

Detroit is the most populous city in the U.S. state of Michigan, the largest city on the United States – Canada border, and the seat of Wayne County. The municipality of Detroit had a 2016 estimated population of 672,795, making it the 23rd-most populous city in the United States. New data from the 2020 U.S. Census shows Michigan’s largest city continued a seven-decade trend of losing residents. Detroit’s population decline has been evident in every census since the city’s peak in 1950 when 1.8 million people lived there. Detroit was home to 639,111 residents in 2020, according to new data released by them, a drop of 10.5% or almost 75,000 residents from a decade ago.

It's also the seventh straight decade Detroit's population has declined since the census showed the city with nearly 1.85 million residents in 1950 However if you consider the metropolitan area, known as Metro Detroit, is home to 3.53 million people, a 0.51% decline from 2020. According to Wikipedia, it is the second-largest in the Midwest after Chicago. Since many older residents are moving back in and new businesses are bringing increased job opportunities for the city, there could be an upward population growth trend soon.

Although, this article alone is not a comprehensive source to make a final investment decision for Detroit we have collected ten evidence-based positive things for those who are keen to invest in the Detroit rentals in 2021 or 2022. Investing in Detroit rentals will fetch you good returns in the long term as the home prices in Detroit have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Detroit real estate market which can help investors who are keen to buy an investment property in this city.

Is Detroit's Economy Growing?

Compared to many other real estate markets across the country, Detroit is an affordable market to both invest in or rent real estate in the current year of the housing boom (led by pandemic). The city also has the headquarters of many Fortune 500 companies which is directly proportional to the city’s economic and employment development. The most heavily represented sectors are manufacturing (particularly automotive), finance, technology, and health care.

The most significant companies based in Detroit include General Motors, Quicken Loans, Ally Financial, Compuware, Shinola, American Axle, Little Caesars, DTE Energy, Lowe Campbell Ewald, Blue Cross Blue Shield of Michigan, and Rossetti Architects. On May 21, 2014, JPMorgan Chase announced that it was injecting $100 million over five years into Detroit's economy, providing development funding for a variety of projects that would increase employment. It is the largest commitment made to anyone city by the nation's biggest bank.

Between 2010 and 2019, the Detroit metropolitan area's economy expanded, and labor force participation increased. Automobile manufacturing continues to be Detroit's largest industry. Despite losing nearly 40% of its manufacturing jobs in the 1980s, the automotive industry continues to be the city's primary economic driver. According to UofM, between 2012 and 2019, Detroit’s poverty rate plummeted from 42.3% to 30.6%. This equates to 77,000 fewer Detroiters in poverty in 2019.

Detroit’s nearly 12 percentage point decline in poverty was larger than that of most large industrial cities in the Midwest and Northeast. For comparison, Cleveland and Philadelphia saw declines of 5.3 and 3.6 percentage points, respectively. Detroit’s poverty rate in 2019 was the city’s lowest in more than a decade and below what it was in 2007, before the last major economic downturn.

Detroit's employment recovery from COVID is exceeding expectations, according to the University of Michigan Economic Forecast. The city is making significant progress in its recovery from the COVID pandemic. According to a new economic forecast released by UofM, “Detroit's unemployment rate has declined more rapidly than we anticipated last year.” The City released its Economic Outlook for Detroit through 2026, in collaboration with the University of Michigan, which examines employment, unemployment, and wage trends and projections.

The forecast predicts a stronger recovery in Detroit than statewide. This pace of recovery is supported by several large development projects, such as Stellantis’ Mack Avenue plant expansion, the Gordie Howe International Bridge project, and a new Amazon distribution center under construction at the former Michigan State Fairgrounds.

According to the study, which looks at data through June of 2021:

Unemployment among Detroiters has already recovered to approximately 3% below its pre-pandemic level.
Detroit’s unemployment rate, which spiked to more than 38% in May of 2020 and averaged 22% for a year, has declined dramatically.
By contrast, Detroit’s unemployment rate so far this year has averaged 9.9 percent and registered at 8.5 percent in June.
Detroit’s unemployment rate is projected to average 9.5 percent this year and to decline gradually to 6.9 percent by 2026.

Increasing Detroit Home Values

Since residential properties in Detroit still have price tags that vary significantly from other real estate markets, investors can find properties at lesser a price than other markets. However, within the city, these prices are increasing at a rapid pace (+20% YOY) and investors are encouraged to consider this market since the growth is expected to stay for a long time.

Detroit is an Affordable & Growing Housing Market

While the general rates of the Detroit real estate market are increasing, buying a property here is still more affordable than in other competitive markets. Even though housing prices in Detroit are rising, among large cities, Detroit is still pretty affordable. There are an estimated 500,000 rental units in the Detroit-Warren-Dearborn metro area that are affordable to someone making up to 60% of the area median income, according to an analysis of 2019 American Community Survey data. Investing in the Detroit real estate market today will get potential owners a range of properties at cheaper rates and they can either rent them out for improved cash flow or sell them whenever the market is soaring high.

Detroit Rental Market

Those looking for investing in rental properties to improve their cash flows can confidently consider Detroit real estate market for both housing and commercial properties. Although Detroit's rent is affordable compared to other big cities, rent has gone up within the city over the past few years. Affordability ranked as the top factor in renters deciding to move, with job opportunities coming in second. This is one of the main reasons that many residents who had previously moved away from the city for better prospects are coming back and restoring their properties to get the advantage of increased rental rates.

Construction has been booming in Detroit these past couple of years. A majority of that construction has been in the Detroit housing market, and even more so rentals. A report from RentCafe.com showed the metro areas around the country building the most apartments, and while metro Detroit is pretty far down the list, but showing a steep increase from last year. 175% increase, to be exact, adding 1,615 new rentals to the market in 2017. Of the new rentals available, 785 are in the city. The new developments along the Riverfront and Lafayette Park open this year, specifically Orleans Landing and DuCharme Place.

The Zumper Detroit Metro Area Report analyzed active listings in August 2021 across 5 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Michigan one-bedroom median rent was $931 last month. Ann Arbor was the most expensive city with one-bedrooms priced at $1,230 while Detroit was the most affordable city with one-bedrooms priced at $850.

The Fastest Growing Cities in Detroit Metro Area For Rents (Y/Y%)

Detroit had the fastest-growing rent, up 14.9% since this time last year.
Novi saw rent climb 14.7%, making it second.
Ypsilanti was third with rent increasing 4.7%.

The Fastest Growing Cities in Detroit Metro Area For Rents (M/M%)

Detroit had the largest monthly rental growth rate, up 4.9%.

Detroit Rental Market Trends — Source: Zumper

Thriving Detroit Downtown

Owing to rapid growth in the demographics of Detroit in recent years, its downtown is also seeing significant development and has improved the quality of life for the residents of this city in Michigan. In the central portions of Detroit, the population of young professionals, artists, and other transplants is growing and retail is expanding. This dynamic is luring additional new residents, and former residents returning from other cities to the city's Downtown along with the revitalized Midtown and New Center areas. There are popular eateries, sports teams with significant fan bases, regular concerts, and a generally happening nightlife.

The same could not be said for this city a few years ago and now it attracts several businesses and consequently, families that choose to live here. Many large corporations already have their presence in Detroit and many more businesses are being attracted to the city owing to its fast growth. This growth directly translates to increased jobs in the city, which also means more demand for residential properties. Keeping its current growth in view, Detroit real estate market is also a budding prospect for entrepreneurs who are looking for affordable rents and properties in growing markets.

Tourism In Detroit

Because of its unique culture, distinctive architecture, and revitalization and urban renewal efforts in the 21st century, Detroit has enjoyed increased prominence as a tourist destination in recent years. The New York Times listed Detroit as the 9th-best destination in its list of 52 Places to Go in 2017, while travel guide publisher Lonely Planet named Detroit the second-best city in the world to visit in 2018.

Metropolitan Detroit is a hub for entertainment options where many festivals are organized regularly, including musical shows and cruises, and has a wide range of hotels to choose from. Other tourist attractions include parks and museums which tourists frequent all year round. Owing to its many tourist attractions, the city constantly needs short-term and affordable residential options.

Detroit Government Initiatives

The government of Detroit has also been playing an important role when it comes to the development of the real estate market in the city. Developing parks and green zones around the city and improving the urban quality of life in the suburbs and all over the city. This is another reason for the rapid development of the Detroit real estate market.

Generally, Detroit is a city home to people from various walks of life coming from a range of financial and economic categories. This is a healthy environment for families and businesses to flourish in as it offers a balance of both modernity and tradition. Detroit's real estate market holds a high value since it offers a well-rounded lifestyle for people who choose to reside in or move back here.

Education

Detroit is home to several institutions of higher learning including Wayne State University, a national research university with medical and law schools in the Midtown area offering hundreds of academic degrees and programs. The University of Detroit Mercy, located in Northwest Detroit in the University District offers more than a hundred academic degrees and programs of study including business, dentistry, law, engineering, architecture, nursing, and allied health professions.

The University of Detroit Mercy School of Law is located Downtown across from the Renaissance Center. With about 66,000 public school students (2011–12), the Detroit Public Schools (DPS) district is the largest school district in Michigan. Detroit has an additional 56,000 charter school students for a combined enrollment of about 122,000 students.

Health

Within the city of Detroit, there are over a dozen major hospitals which include the Detroit Medical Center (DMC), Henry Ford Health System, St. John Health System, and the John D. Dingell VA Medical Center. DMC is the largest private employer in the City of Detroit. The center is staffed by physicians from the Wayne State University School of Medicine, the largest single-campus medical school in the United States, and the United States' fourth largest medical school overall. In 2011, Detroit Medical Center and Henry Ford Health System substantially increased investments in medical research facilities and hospitals in the city's Midtown and New Center.

Transportation

With its proximity to Canada and its facilities, ports, major highways, rail connections, and international airports, Detroit is an important transportation hub. The Ambassador Bridge in Detroit is the single busiest border crossing in North America, carrying 27% of the total trade between the U.S. and Canada. Mass transit in the region is provided by bus services.

The Detroit Department of Transportation (DDOT) provides service to the outer edges of the city. From there, the Suburban Mobility Authority for Regional Transportation (SMART) provides service to the suburbs and the city with SMART's FAST service. FAST is a new service powered by SMART, which offers limited stops and connects the suburbs to downtown quickly and easily.

Summary

Another good market to choose for investment 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. 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. Savannah home values have gone up 17.1% over the past year and are projected to continue to increase over the next twelve months.

The other good place to invest in real estate 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 typical value of homes in Chico is $444,278.

Chico home values have gone up 14.2% over the past year. In August 2021, Chico home prices were up 5.5% compared to last year, selling for a median price of $445K (source: Redfin). On average, homes in Chico sell after 19 days on the market compared to 20 days last year. Many homes get multiple offers, some with waived contingencies.

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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References

https://gmaronline.com/resource-library

https://www.mirealtors.com/housing-statistics

https://www.zillow.com/detroit-warren-dearborn-mi/home-values/

https://www.zumper.com/blog/detroit-metro-report/

https://www.redfin.com/state/Michigan/housing-market/

http://www.freddiemac.com/research/indices/house-price-index.page

https://www.realtor.com/realestateandhomes-search/Wayne-County_MI/overview

https://www.neighborhoodscout.com/mi/detroit/real-estate

https://www.pioneerhomesus.com/why-detroit

https://en.wikipedia.org/wiki/Detroit

https://www.biggerpockets.com/renewsblog/detroit-real-estate-market

https://www.verticalrent.com/entry/7-reasons-why-the-detroit-real-estate-market-is-heating-back-up

https://detroitmi.gov/news/uofm-economic-forecast-shows-detroits-employment-recovery-covid-exceeding-expectations

Raleigh Housing Market: Prices | Trends | Forecast 2021-2022

September 21, 2021 by Marco Santarelli

If you are looking to invest in Raleigh real estate, you must read till the end. Raleigh, North Carolina is a southeastern city often overshadowed by the larger Charlotte market. Raleigh is the capital of North Carolina. It is the second-largest city in the state. It is home to roughly half a million people. However, the Raleigh housing market is much larger than this. The Raleigh metropolitan area – the city and its surrounding suburbs – account for about one and a half million people.

The Raleigh real estate market is landlord-friendly, contains several large populations of renters, and has an economic future that ensures long-term growth in housing demand and rents. Owning a piece of Raleigh real estate is a great achievement for many people. Homeowners in Raleigh continue to see their homes appreciate because they are in such high demand. From Millennials moving to the area to retirees living here, Raleigh continues to be a great place for people from all walks of life.

Recent forecasts and predictions for the Raleigh housing market suggest that home prices will continue rising in next twelve months. The cumulative appreciation rate over the ten years has been 55.26%, which ranks in the top 30% nationwide. This equates to an annual average Raleigh house appreciation rate of 4.50%, according to NeighborhoodScout.com. House appreciation rates in Raleigh were 2.02 percent in the most recent quarter, equating to an annual appreciation rate of 8.31 percent.

Raleigh Housing Market Trends & Forecasts 2021 – 2022

Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Raleigh area from multiple sources and compare them with the past couple of years. We shall mainly discuss median home prices, inventory, and growth, which will help you understand the way the local real estate market moves in this region.

If you are a home buyer who’s looking for a new place to call home or a savvy real estate investor who is looking for a strong ROI, then you should consider all that Raleigh NC real estate market has to offer. Raleigh is a minimally walkable city in Wake County with a population of approximately over 467K people (2020). The Raleigh housing market has been on the incline in 2021.

The United States Census Bureau released new data on how much each county's housing stock expanded over the decade from 2010 to 2020, and a new analysis by Apartment List finds that Raleigh ranks third among the top 100 most populous metropolitan areas, behind Provo, Utah, and Austin, Texas, but just ahead of Boise, Idaho, with housing growth of 23.5 percent.

According to Charlotte mortgage site LendingTree, Raleigh is the third most competitive market in the United States, owing to a high proportion of homebuyers with credit scores above 700, a 20% or greater down payment, and mortgage shopping prior to looking for a home. Raleigh is also experiencing an increase in rental rates, as Apartment List discovered in a recent analysis of the rental market.

Raleigh rents have increased by 3.43% compared to last month, and are up by 11.2% compared to last year. 79% of apartments in Raleigh cost between $1,000-$1,999 per month. 44% of apartments in Raleigh are 1-bedroom apartments.

Freddie Mac publishes a monthly house price index that measures changes in housing prices over the previous quarter and year, as well as historical pricing trends. According to the most recent Freddie Mac House Price Index (FMHPI) report for the Raleigh Metropolitan Statistical Area (MSA):

June 2011 HPI: 116.5
June 2021 HPI: 226.53
10-year change in home prices: 94.45%
Annual House Price Appreciation: 20.85%
Monthly change in home prices: 2.41%

Wake County Housing Market Trends 2021 (year-over-year)

The median home sales price in Wake County in July was $407,319. Homes are selling for about 21% more now than a year ago. Apple announced that it will open its first East Coast campus in Wake County, creating 3,000 new jobs and investing more than $1 billion in the Research Triangle area. With Apple bringing 3,000 high-paying jobs on the way to Wake County, prices in the local housing market would go up considerably. The company said it will also create a new $100 million fund for schools and community initiatives in the Triangle and around North Carolina.

According to a new analysis of real estate data conducted by the Triangle Multiple Listing Service:

New Listings in Wake County dropped from 2,410 to 2,154, down – 10.6%.
Closed Sales dropped from 2,391 to 1,974, down – 17.4%.
Median Sales Price increased from $337,000 to $407,319, up +20.9%.
Average Sales Price increased from $379,734 to $472,447, up +24.4%.
Days on Market Until Sale dropped from 24 to 7, down – 70.8%.
Inventory of Homes for Sale dropped from 3,006 to 1,154, down, – 61.6%.
Months Supply of Inventory also dropped from 1.6 to 0.6, down – 62.5%.

In August 2021, Wake County home prices were up 14.3% compared to last year, selling for a median price of $400K, according to Redfin. On average, homes in Wake County sell after 31 days on the market compared to 47 days last year. There were 2,059 homes sold in August this year, down from 2,133 last year.

Raleigh Housing Demand

Home sales fell this month compared to last July. July sales were down by 14.5% over July of last year, according to the data from Triangle Multiple Listing Service (source). The average sale price in Raleigh rose this month. The median price of homes sold in July was $375,000. That's an increase of 23.6% over last year in July. The average sales price increased by 27.3% to $467,805. When compared to last July, the average days on market before a sale fell dramatically this month. In July, the average number of days on the market was seven. This is a 65 percent decrease from July of last year.

Raleigh Housing Supply Trends

Active listings or Inventory of Homes for Sale fell in July Listings dropped a whopping 44.9% from last year in July. Months Supply of Inventory is just 0.8. It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months' supply tends to push prices up more rapidly.

Raleigh Home Listing Prices

The median list price of homes in Raleigh, NC was $360K, trending up 15.4% year-over-year. The median listing price per square foot was $182. The median sale price was $380K, according to Realtor.com's July 2021 report.

The sale-to-List Price Ratio was 100%.
It means that homes in Raleigh, NC sold for approximately the asking price on average in July 2021.
The trend for median days on market in Raleigh, NC has gone up since last month, and slightly down since last year.
There are 72 neighborhoods in Raleigh.
Popular neighborhoods include North Hills, North Raleigh, Glenwood, Northwest Raleigh, Downtown Raleigh, Southwest Raleigh, West Raleigh, and Oakwood.
Glenwood has a median listing price of $899.9K, making it the most expensive neighborhood.
Triangle Town Center is the most affordable neighborhood, with a median listing price of $265K.

In August 2021, Raleigh home prices were up 15.6% compared to last year, selling for a median price of $376K based on 860 homes sold, according to Redfin, a real estate company. On average, homes in Raleigh sell after 31 days on the market compared to 42 days last year. There were 860 homes sold in August this year, down from 888 last year.

Many homes get multiple offers, some with waived contingencies.
The average homes sell for about 5% above the list price and go pending in around 31 days.
Hot home listings can sell for about 11% above list price and go pending in around 9 days.
At present, homes for sale in Raleigh have a median listing price of $385K.

Raleigh Rent Price Trends: Is Renting in Raleigh Affordable?

Raleigh has a mixture of owner-occupied (51%) and renter-occupied (49%) housing units. The average rent for a 1-bedroom apartment in Raleigh, NC is currently $1,258. This is a 22% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Raleigh increased by 2% to $1,215. The average rent for a 1-bedroom apartment increased by 6% to $1,258, and the average rent for a 2-bedroom apartment increased by 3% to $1,397.

The average rent for a 2-bedroom apartment in Raleigh, NC is currently $1,397. This is a 15% increase compared to the previous year.
The average rent for a 3-bedroom apartment in Raleigh, NC is currently $1,794. This is a 14% increase compared to the previous year.
The average rent for a 4-bedroom apartment in Raleigh, NC is currently $2,020. This is a 9% increase compared to the previous year.

According to Apartment List, 5% of apartments in Raleigh cost less than $1,000 per month while 79% of apartments in Raleigh cost between $1,000-$1,999 per month. 15% of apartments in Raleigh are priced between $2,000 and $2,999 per month and 1% of apartments in Raleigh cost over $3,000 per month. Using the 30% rule, you can get a rough estimate of the salary needed to rent an apartment in Raleigh.

If you are renting an average-priced studio apartment in Raleigh, your annual salary should be around $52,452 or higher.
If you are renting an average-priced 1-bedroom apartment in Raleigh, your annual salary should be around $52,992 or higher.
If you are renting an average-priced 2-bedroom apartment in Raleigh, your annual salary should be around $65,808 or higher.

Raleigh Real Estate Market Forecast 2021 – 2022

Recent forecasts and predictions for the Raleigh, North Carolina housing market suggest that home prices will continue rising in 2021 & 2022. Prices are expected to rise at a more or less average pace between now and the summer of 2022. The Raleigh real estate market is currently experiencing a supply shortage, which is partly why home prices are climbing in the region. The Months Supply of Inventory is just 0.8.

According to Zillow, homes in Raleigh are selling in just four days. It ranks Raleigh second in the U.S. for the fewest days a home is officially listed on the market. Let us look at the price trends recorded by Zillow over the past few years. Since Sep 2011, the median home prices in Raleigh have appreciated by roughly 77.7%, according to Zillow’s Home Value Index. Raleigh home values have gone up 20.5% over the past year. The typical value of homes in Raleigh is now $360,891 (which only includes the middle price tier of homes).

The typical value of homes in Raleigh Metro (Caraleigh) is $353,248, up 20.3% over the past year.
Zillow predicts that home values in Raleigh Metro will rise 15.2% in the next twelve months.
The typical value of homes in Wake County is $385,648, up 20.2% over the past year.
The Raleigh real estate market forecast is that the home prices will continue to increase in the next twelve months.

Raleigh real estate market forecast — Source: Zillow

Is Raleigh a Good Place For Real Estate Investment?

Should you invest in Raleigh real estate? If you want to find out whether Raleigh real estate is a good investment or not, you need to drill deeper into local trends. The Raleigh real estate trends will tell what the market holds for the year 2021. We have already discussed the Raleigh housing market forecast for answers on why to put invest in this market. Purchasing an investment property in Raleigh real estate is a little different from shopping for your car or primary residence.

While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the Raleigh real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, a turnkey investment property in Raleigh that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider.

According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in Raleigh. Other types of housing that are prevalent in Raleigh include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.

About a third of Americans rent their homes. In the Raleigh NC real estate market, the rate is 43%. This is partially due to the large student market, but it is also fueled by young people moving here for work. That explains why downtown Raleigh rents grew 9% in 2018. It also explains why you can rent out a studio for $900 a month and one-bedroom apartments for a thousand dollars a month.

Kiplinger, a leading publisher of business forecasts and personal finance advice, uses ATTOM Data Services to compile data on home price changes and housing affordability in the country's top 100 markets. The affordability index indicates a city's relative affordability (1 is the most affordable, 10 is the least affordable). It is calculated as the percentage of annual income required to purchase a median-priced home in late 2020 in each metro area. Raleigh has an affordability index of six out of ten, making it one of the most expensive cities in the United States to own a home. New York City is the most expensive city, while Augusta, Georgia is the least expensive.

To consider the prospects of investing in the Raleigh NC real estate market, we’ll focus on factors that matter to investors instead of citing the many high quality of life metrics and awards the city receives that draw new residents to the area.

The Student Market

College towns can be a great place to buy investment real estate, but the rise and fall of the flagship campus affect demand for real estate. Any state capital will be home to at least one flagship university. North Carolina State University is located here. However, the Raleigh NC real estate market for those catering to students is diversified, so to speak. Meredith College, St. Augustine’s University, and Shaw University are also located here, as are several other private religious schools.

If you invest in the Raleigh suburbs, you could attract students from Duke University in Durham and the University of North Carolina in Chapel Hill. Young people from across the globe want to experience Raleigh. From attending school at one of the local, prestigious colleges to working in the infamous Research Triangle Park, Raleigh is the new destination for young people who are interested in a fresh start and a great home to live in.

The Growing Technological Employment Base

The Research Triangle Park area consists of Raleigh, Durham, and Chapel Hill. These research centers are generating many high-tech startups and jobs, bringing people to the area for high-paying jobs. Red Hat is one of the biggest employers in the area, despite the school system, state and local governments being major employers. The high-tech sector helps explain why Raleigh’s income per capita is roughly $33,682 while the national average is $29,829 and far above the $26,779 state average. Raleigh was ranked number one in Glassdoor’s 25 Best Cities for Jobs report.

In April, Apple announced a new campus and engineering hub that will bring many high-paying jobs to the area. The site will be located off the Triangle Expressway between Louis Stephens Drive and Davis Drive. In addition, Apple will invest $100 million to support schools and community initiatives in the Triangle and will put more than $110 million toward infrastructure in 80 North Carolina counties. In total, Apple said it will invest more than $1 billion in the state.

Raleigh's Diverse Economic Base

Unemployment tends to be lower in areas with a diverse economies. Raleigh is home to several major hospitals. It hosts an international airport. The high-tech sector is so large we’ve already mentioned it as a point in favor of the Raleigh NC real estate market. This diverse economic base protects a community from the rise and fall of employment tied to a single market sector. This explains why Raleigh’s unemployment rate was one point lower than the state average in 2018 and was three points lower than the unemployment rate for the state during the Great Recession.

The BLS reported that the unemployment rate for Raleigh fell 0.1 percentage points in July 2021 to 3.7%. For the same month, the metro unemployment rate was 0.7 percentage points lower than the North Carolina rate. The unemployment rate in Raleigh peaked in May 2020 at 12.1% and is now 8.4 percentage points lower. The relative abundance of jobs brings many to the Raleigh area, while it will keep many students graduating from their schools in the area.

Low Overall Taxes

North Carolina’s overall tax burden is roughly 30th out of the 50 states according to WalletHub. Property taxes clock in at an average of 2.3%. That’s 11th in the country but far better than a number of eastern states. Georgia’s property tax rate, for example, is 2.75%, and neighboring South Carolina’s comes in at 2.91%.

It Is Landlord Friendly

North Carolina on the whole is landlord-friendly. There are payment grace period laws, but you can charge late fees. There are no pet laws or rekeying laws in North Carolina. And unlike other states, North Carolina has been becoming more landlord-friendly. For example, a law passed in 2018 allows landlords to recover legal fees and the cost to issue a court summons when they had to go to court to evict a tenant. This isn’t a blank check, though. Recovered legal fees can’t exceed 15% of the amount owed.

Raleigh Real Estate is Relatively Affordable

North Carolina homes cost an average of $180,000. You can buy several investment properties here for the cost of one middle-class home in California or a loft in New York City. The area is so affordable that housing costs score 92 on the cost of the living index while the national average is 100. The median home value of roughly $254,000 (Zillow). NerdWallet had ranked Raleigh one of the best places to own a home. Over 70% of Raleigh's land is zoned for residential use, which contributes to the city's affordability of housing relative to Austin, Atlanta, and Charlotte.

The Modest Military Market

Raleigh is almost ideal in this case. The community isn’t the home of Fort Bragg, but that means the community’s real estate market won’t rise and fall based on the fate of a large base. Instead, there are several moderately sized military employers in the area. Raleigh is home to one of 65 MEPS to induct people into the military. Raleigh is home to the North Carolina National Guard, Civil Air Patrol, a US Army Corp of Engineers, and an Army Research Office. An office of the Defense Criminal Investigative Service is located here, as well.

Conclusion

Maybe you have done a bit of real estate investing in Raleigh 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. The strong US real estate market shows no signs of slowing and is slated to remain among the world’s top performers. Whether you are a Baby Boomer or a Millennial, you will find living in Raleigh is a unique experience. From being a leader in the job market to being a hub for entertainment, it’s pretty clear why many people love to call Raleigh home.

A good cash flow from Raleigh rental property 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 Raleigh real estate investment opportunity would be a key to your success. If you invest wisely in Raleigh real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it is very important to read good books on real estate.

The less expensive the Raleigh investment property is, the lower your ongoing expenses will be. Some of the most popular neighborhoods in Raleigh are Downtown Raleigh, Southwest Raleigh, Wake Forest, West Cary, Oakwood, Forestville, Stonehenge, North Hills, Northeast Raleigh, Lochmere, Fayetteville Street District, North Raleigh, Five Points East, Northwest Raleigh, and Brier Creek.

Apart from the Raleigh market, you can go for Tucson, AZ. The Tucson housing market has recovered and is poised for slow, steady, and certain long-term growth. The shifting demographics and known groups eager to sell at the right price provide an excellent opportunity to find bargains almost anywhere in the Tucson real estate market. Tucson consists of 583 neighborhoods. Many people move to Tucson and then commute to work in surrounding cities.

Tucson’s relatively slow and steady growth rate means that new construction is at a crawl. That is causing rents to rise faster than average, especially at the low end of the market. Another factor propping up home prices is the relatively small inventory on the market; snowbirds typically sell when they need to instead of based on market conditions.

Another market that we suggest is Dayton, Ohio. The Dayton Ohio real estate market is one of the best deals in the Midwest. It balances affordable properties with strong future growth, a large rental market and stable property values, low carrying costs, and decent ROI. The average home size is roughly 1,350 square feet. Downtown Dayton and its suburbs are doing a nice job of incentivizing new businesses to come into the area. Existing businesses are also benefiting from positive housing market trends in Dayton. While the overall Dayton housing market is booming, downtown Dayton has struggled with crime from time to time. The good news is that the city has steadily reduced crime.

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. Consult with one of the investment counselors who can help build you a custom portfolio of turnkey cash-flow rental properties in the various growth markets across the United States.

All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

References

Market Trends And Forecast
https://www.zillow.com/raleigh-nc/home-values
https://www.realtor.com/local/Raleigh_NC
https://www.redfin.com/city/35711/NC/Raleigh/housing-market
http://www.homesinraleigh.org/raleigh-housing-report.html
http://www.metrodepth.com/raleigh-forecast-another-average-year
http://www.freddiemac.com/research/indices/house-price-index.page

Rental Market
www.zumper.com/rent-research/raleigh-nc
www.bestplaces.net/housing/city/north_carolina/raleigh
www.rentcafe.com/average-rent-market-trends/us/nc/raleigh
https://www.apartmentlist.com/renter-life/average-rent-in-raleigh

Universities and demographics
www.en.wikipedia.org/wiki/Raleigh,_North_Carolina

Higher average income
www.areavibes.com/raleigh-nc/employment

Tax rates
www.wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

Landlord friendly
www.portcitydaily.com/local-news/2018/06/30/heres-how-north-carolinas-new-eviction-fee-law-changes-things-for

Landlords-and-tenants
www.avail.co/education/laws/north-carolina-landlord-tenant-law

Military market
www.mepcom.army.mil/Units/Eastern-Sector/ 12th-Battalion/Raleigh

About Marco Santarelli

St. Louis Housing Market Trends 2021 (Describes August)

St. Louis Real Estate Market Forecast 2021-2022

St. Louis Real Estate Investment Overview

Its Overall Affordability for Investors

The Market’s Price Stability

The True Bargains Are Abundant

The Massive Renter’s Market

The Known Redevelopment Opportunities in St. Louis

Summary

Houston Housing Market Trends 2021 (Describes August)

The Houston Housing Market's Performance in the Previous Year

Houston Real Estate Market Forecast 2021-2022

Houston Rental Market Trends 2021

Impact of COVID-19 on The Houston Housing Market

Houston Real Estate Market After Hurricane Harvey

Houston Real Estate Investment Outlook

Top Reasons To Invest In The Houston Real Estate Market

Other Texas Real Estate Investment Markets

Spokane Housing Market Trends 2021 (Describes August)

Spokane Real Estate Market Forecast 2021-2022

Spokane Real Estate Investment: Should You Invest in Spokane?

Spokane's Geography Limits Housing Supply

California’s Loss is Spokane’s Gain

Spokane isn’t like Oregon

Spokane Housing Costs Remains Cheap Compared to Other West Coast Cities

Spokane Beats Seattle, Too

Spokane Has Low Tax Rates for a West Coast City

Spokane's Strong Rental Market

The City Is Poised to Take Off

Michigan Housing Market Trends 2021 (Most Recent Stats)

Greater Detroit Real Estate Market Trends 2021 (Describes August YOY)

Detroit (Wayne County) Housing Market Trends 2021

Detroit Metro Housing Market Forecast 2021-2022

Detroit Real Estate Investment Overview

Is Detroit's Economy Growing?

Increasing Detroit Home Values

Detroit is an Affordable & Growing Housing Market

Detroit Rental Market

Thriving Detroit Downtown

Tourism In Detroit

Detroit Government Initiatives

Raleigh Housing Market Trends & Forecasts 2021 – 2022

Wake County Housing Market Trends 2021 (year-over-year)

Raleigh Housing Demand

Raleigh Housing Supply Trends

Raleigh Home Listing Prices

Raleigh Rent Price Trends: Is Renting in Raleigh Affordable?

Raleigh Real Estate Market Forecast 2021 – 2022

Is Raleigh a Good Place For Real Estate Investment?

The Student Market

The Growing Technological Employment Base

Raleigh's Diverse Economic Base

Low Overall Taxes

It Is Landlord Friendly

Raleigh Real Estate is Relatively Affordable

The Modest Military Market

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